Smartists IP Licenses : Introduction and Definitions [2023 Update]

Licenses for Independent self-managed artists on the web3.

Updated for NFTs and Ordinals

Introduction

*Premise-Disclaimer. This set of licenses is a proposal from The Smartists community, looking for the best solutions for Ip management for independent artists-authors on the web3. This initiative is lead by author-illustrator Georgina Garcia-Mauriño and will be tested with some her pieces to be sold on the web3 with an IP license. Since this proposal is intended to artists and art-users  around the world, it is compliant with the Universal Declaration of Human Rights and the Bern Convention, and it aligns with the principles and definitions of the World Intellectual Property Organization [WIPO]. The design of licenses has been inspired by regulations and jurisprudence in the United States and in Europe, as well as by the successful example of the Creative Commons non-commercial Licenses as a system accepted by users as well as in court. Licenses are just contracts between two parties, and these Smartists IP Licenses address new commercial use cases for IP patrimonial rights that Blockchain technology enables via NFTs, Ordinals  and smart contracts. Therefore, we are well aware that only time can prove the usability as well as the enforcement of their terms and conditions. 

WHAT are the Smartists IP Licenses?

The Smartists licenses are a set of licensing options for the management of Intellectual Property Economic Rights, those rights that authors have to get compensation from their original creations and be able to live on their work.

IP independent management on the web is now possible like never before. The web3, the Internet of Value, enables artists to benefit from the economic rights they lawfully get for every creation they bring to the Internet. New use-cases in a still under-regulated setting opens the door to new ways of IP management for independent artists-authors as long as they hold and are able to self-manage their rights.

The Smartists Licenses apply to the digital assets minted or inscribed as Genuine Tokens -NFTs or Ordinals/Digital Artifacts-. Each Genuine Token is representing an asset which we call a Genuine Master [see definitions].

Moreover, the buyer of a Genuine Token can use the token itself (usually a small file) with a Genuine Token License. This license declares what the buyer can do with the token he receives at the payment. Yet, to download and use the original underlying file (usually a large file) the buyer will need a Genuine Master License.

Therefore, according to this distinction there are 2 types of Smartists IP Licenses depending on the file to be used: 

• Genuine Token Licenses granting the right to Public Display of the Genuine Token, for those use-cases where the master does not need to be provided for download (Eg. collectibles for promoters, collectors, galleries...).

• Genuine Master Licenses granting different levels of rights for the use of the Genuine Master, in those use-cases where buyers need to download the underlying master to use it (Eg. masterpieces for creative art-users...). 

WHO can use the Smartists Licenses to grant IP use-rights?

Only independent authors who hold the copyrights of an original creative piece of art, fixated in a stable medium so that it can be minted as a Genuine Token -Ordinal or NFT-, can use the Smartists IP Licenses.  

In other words, the Smartists licenses are meant for art works as “Genuine Tokens” [see definition] minted by their author who is responsible for its originality and for holding the IP rights. Artists-authors having signed a contract for the management of their rights (with a personal manager or any other rights management entity, publisher, distributor, etc.), need to look into the scope of such previous agreements to check what is still possible for them to mint independently on the web3 as Ordinals or NFTs. 

These licenses have been designed with creators-authors as individual independent persons in mind, NOT companies (an extended interpretation in the United States, but not in Europe). Therefore, these licenses may not suit all the needs of companies minting NFTs or inscribing Ordinals, but they can be useful to companies looking for exclusive artworks to purchase from independent authors.

WHAT NFTs can be sold with Smartists Licenses?

The Smartists licenses are meant for “Genuine NFTs” [see definition], mined by their author who is responsible for its originality and for holding the IP rights. Artists-authors having signed  a  contract for the management of their rights (with a personal manager or any other rights management entity, publisher, distributor, etc.), might need to check the scope of such previous agreements to check what is still possible for them to mint NFTs independently./

NOTE. So far, these licenses only consider the art works minted as Genuine Tokens by one author. If the art piece is the result of a collaboration, you need to consider some other agreements with collaborators before using the Smartists Licenses.

Definitions

INTERNATIONAL SMARTISTS LICENSING AGREEMENT -I.S.L.A.-

The rules included in a use-license referring to an art-token designed to enable Intellectual Property holders -writers, artists, musicians, performers and digital editors- to grant copyrights of their content in their terms. All I. S. L. A. can be interpreted with the present definitions which are compliant with the Universal Declaration of Human Rights, and align with the W.I.P.O. principles, as a global framework for International validity. 

SMARTISTS LICENSE

The sum of rules that apply for the use of an original digital art file minted as Genuine Tokens as defined below and in the General Terms applying for all Smartists Licenses.

Smartists General Terms and Conditions are rules that apply by default to all Smartists ‘Token Licenses’ and Smartists  ‘Master Licenses’.

Smartists Special Terms and Conditions: specific rules opted by the copyrights holder when licensing IP use-rights for a specific art piece tokenized as an Ordinal or an NFT. These include: type of license, duration, price, jurisdiction, etc. For every license to work the buyer needs to acknowledge and agree to these specific terms of use at the time of payment.

TYPES of SMARTISTS NFT LICENSES

The Smartists “Genuine TOKEN Licenses” [GTLs] are designed for artists and collectors who want to use their Tokens -Ordinals or NFTs- for promotion or as commercial collections. Token Licenses don’t grant any rights to download neither use the underlying original Master, they include the right to Publicly Display the token under the condition of Attribution (giving credit to the creator).  

Smartists GTLs are non-exclusive licenses or “Branding Licenses” are designed for artists who want to build a personal brand by selling multiple Tokens as collectibles allowing different buyers to use them more freely. The creator can mint and sell several times Genuine tokens from an original piece of its own licensing the buyers to Display and Adapt the token.

At the time of writing this introduction we are considering 3 levels of “Genuine Token Licenses”- GTLs [ In Progress ].

The Smartists “Genuine MASTER Licenses” [GMLs] are designed as “Masterpieces Licenses” for artists and creative art-users who look for P2P professional relationship based in exclusivity. 

GMLs are exclusive licenses or “Masterpiece Licenses”. During that time the author cannot mint and sell another Token representing /from the same art work, and at the time of the license termination, the artist and the art-user can opt between a renewal or the expiration of the license. These licenses are intended for the independent artist selling a Genuine Token to a client who will use the underlying work exclusively until expiration of the License.

There are 4 levels of “Genuine MASTER Licenses”-GMLs  granting different use-rights of the master, and buyers have access to the underlying original Master. [ In Progress ]

ART-TOKENS, NFTS, ORDINALS, LICENSED MATERIAL, GENUINE TOKENS and GENUINE MASTERS

Art-Tokens are copyrighted digital assets -minted as NFTs or inscribed as Ordinals to enter the new blockchain-based marketplaces on the web3, so their transactions can be broadcasted, confirmed, timestamped and recorded in the blockchain publicly and persistently. Any kind of art can be tokenized and brought to this new market.

NFT [Non Fungible Token] is a Digital representation which identifies an asset on the web. It can provide proof of ownership since such unique identifier is recorded on the blockchain linking it to the identifier/wallet of the person minting who can declare and take responsibility as the creator and copyrights owner, just like in any other Intellectual Property Registry. NFTs bring the concept of property to the web enabling transactions for original creations and business for their authors. In the Smartists Licenses, NFTs work as unique content identifiers defining the ‘Licensed-Material’ for the purpose of identifying art works and their authors, enabling the transfer of value in exchange for a price.

ORDINALS are the result of inscribing/including data in 1 Sats on the Bitcoin blockchain (100 000 000 = 1 BTC). With this technology Artists can inscribe their works directly and forever on the first most secure and admittedly durable blockchain. The functionality of Ordinals is similar but not identical to the NFTs in terms of opportunities for artists. Ordinals are preferably called “Digital Artifacts” instead of “Non Fungible Tokens” (NFTs). This technology also brings new possibilities for licensing IP works. In the Smartists licenses we are considering Ordinals as a means to keep your Tokens´Licenses on-chain, in a more traceable and secure way, simplifying the storage issue.

Genuine Tokens are Art Tokens minted or inscribed by the individual creator and IP owner of the original underlying art file [Master]. So far, most NFTs by default provide access to a copy when right-clicking- involving IP rights which need to be managed by the author or are reserved if nothing is indicated. We see this as a flaw in the technology and a challenge for Intellectual Property self-management by independent artists. Whether they are minted as NFTs or inscribed as Ordinals, Genuine Tokens are special tokens because they are minted or inscribed by the copyrights holder of the underlying the art work, who is responsible for the originality and authorship of the piece.  At the time of licensing the author agrees/declares that the “tokenized” piece -minted as NFT or inscribed as Ordinal- is his/her original creation.

Genuine Masters are the original digital files used for minting Genuine Tokens, either NFTs or Ordinals. The use of such master involves locating and downloading the Master, as well as a careful management of IP rights.

Licensed Material is the IP copyrighted material in any format or file -text, image, sound and video-. Depending on the kind of license, this can be either the Token itself, Genuine Token, for any "Genuine Token License" [GTL]; either the Genuine Master, the underlying art digital file, for "Genuine Master Licenses" [GML]. 

Therefore, for a “Genuine Token License” [GTL], this refers to the Genuine Token itself; meanwhile for a “Genuine Master License” [GML], this refers to the the underlying digital file that is minted or inscribed as Genuine Token.

* Tokens and Masters are essentially different in size and quality.

AUTHOR = COPYRIGHTS HOLDER = GENUINE TOKEN CREATOR = LICENSOR

In order to use Smartists, the licensor must be an author and copyrights holder (writer, visual artist, musician, performer or digital creator).

Art work author: the person who created the original material or digitized artwork to be licensed, in whole or in part. By minting or inscribing a Genuine Token, any Art work author declares to be the copyrights holder and takes complete responsibility about the rights granted within the license. Authors are individual persons, not companies.

Copyrights holder: the person who holds the copyrights of an IP digital asset that can be minted as NFT and is entitled to license them. This can be the Art work author or anyone with the legal ability of licensing art work copyrights. By using any I.S.L.A., the token creator declares to be the author of the original piece, and thus the copyrights holder, taking complete responsibility about the rights granted by the license. 

Token creator is the art work author/copyrights holder who mints an NFT or inscribes an Ordinal. Token creators must be copyrights holders of the digital assets they are minting or inscribing and licensing with an I.S.L.A. By using any of the Smartists licenses, creators declare Intellectual Property ownership, thus being entitled to manage the copyrights of the underlying digital asset. 

Licensor is the individual granting rights under a license. By using any I.S.L.A., a Licensor declares to be the copyrights holder and takes complete responsibility about the rights granted by the license.

In the United States companies can be creators and original IP copyrights holders-, but this is not the case in Europe. For the Smartists Licenses we keep the European approach, and we consider as creator the individual person who mints an NFT or inscribes an Ordinal. The Smartists licenses look to meet the needs of independent artists - instead of companies or general brands-. Anyway, some I.S.L.A. are promotional licenses, and can be used by independent artists to build their personal brand. 

In case of joint works Licensor and copyrights holder can act representing the rest of copyrights owners of the digital file to be minted as ART NFT. Nevertheless, in such case, the ART-NFT creator is responsible for any due diligence concerning the rest of copyrights holders, and this may require additional agreements. Therefore, using Genuine NFT for minting joint works may not be the best solution, and we cannot encourage it at this moment. 

COLLECTOR, CREATIVE USER and LICENSEE

Collector: The individual interested in purchasing a Genuine Token with a License just for Public Display or performance. This can be an individual or a gallery or a venue… and depending on their needs they may want a commercial or non commercial license, and also they may prefer it exclusive or non exclusive. 

Depending on the kind of license they have, they can have access to the original master [GML] or not [GTL]. *  

Creative-User: The individual interested in purchasing a Genuine with a license to use the content beyond just Public Display or Performance. Creative-users need to access the original Master file, so they need to purchase a Genuine Master License [GML] to do so. Then creative users agree to comply with some defined terms and conditions, becoming a ‘licensee’.  

Licensee: The individual or entity effectively purchasing a Genuine with a license and agreeing to comply with its terms and conditions.

March 2023

P. S. The Smartists licenses are going to be used by Mirlo Music Editions. If you want to know more about this use-case first-hand. Ask for more information here.