NFTs and Other Digital IP Scopes: Licensing Beyond Physical Products

26 Sep NFTs and Other Digital IP Scopes: Licensing Beyond Physical Products

Digital products are now a real licensing category. NFTs and digital collectibles, virtual goods, avatar
items and branded experiences on online platforms all use a brand’s intellectual property. They deserve the
same discipline as a physical product line, and they bring a few questions of their own.

What the buyer actually owns

With an NFT or virtual item, buyers often assume they own more than they do. Usually they own the token or
item and receive a license to display the associated artwork, while the brand keeps the underlying intellectual
property. The license terms should say this plainly, including whether any commercial use is allowed.

Resale and secondary royalties

Digital collectibles are often resold. Some platforms support royalties to the creator on secondary sales,
but support varies and can change. A brand should not build its economics on secondary royalties alone, and its
agreements should state how any resale income is shared with licensees.

Platforms and permanence

Digital goods live on platforms that can change their rules or shut down. The license should name the
platforms allowed, set out what happens if a platform disappears, and define how long buyers may display the
content.

Protecting the brand

Unauthorized digital collectibles using famous brands have been a problem since NFTs became popular. Brand
owners benefit from watching marketplaces and working with counsel on whether their registrations cover
digital goods. Offering official digital products also gives fans a legitimate choice.

Part of the whole plan

Digital scopes work best as part of a brand’s overall licensing strategy, alongside games, apparel and
collectibles, rather than as a separate experiment. The same questions apply: which partners, which standards,
what the brand earns and how it stays protected.

Our experience

Garfield Agency has worked with NFTs since 2021 through its GARFIELD-NFT division and licenses brands into
games, virtual goods and other digital IP scopes.

Thinking about nfts and other digital ip scopes? Start a conversation with Garfield Agency or read more in our licensing FAQ.

Garfield Agency provides licensing strategy and business services. It is not a law firm and does not give legal advice. For trademark filings, clearance opinions and disputes, work with a licensed attorney.