NFT License

Introducing the NFT License

The NFT License helps define the rights of both owners of ERC-721 non-fungible tokens (NFTs) as well as artists and creators working with NFTs. The NFT License is designed to balance two concerns:

  • Protecting the hard work and ingenuity of creators
  • Granting users the freedom and flexibility to fully enjoy their non-fungible tokens

Any NFT project can use this license.

What am I allowed to do with the art associated with my NFT?

You have broad rights to use the art associated with your NFT. In the case of all MaxCompose arts, you can do any of the following:

  • Use the MaxCompose arts for your own personal, non-commercial use;
  • Use the MaxCompose arts when you’re on a marketplace that allows the purchase and sale of your MaxCompose arts, so long as the marketplace cryptographically verifies that you are the owner;
  • Use the MaxCompose arts when you’re on a third party website or app that allows the inclusion, involvement, or participation of your MaxCompose arts, so long as the website/app cryptographically verifies that you are the owner, and the MaxCompose arts doesn’t stay on the website/app after you’ve left; and
  • Use the MaxCompose arts to commercialize your own merchandise, provided that you aren’t earning more than $100,000 in revenue each year from doing so.

What am I NOT allowed to do with the art associated with my NFT?

There are a few things that aren’t appropriate uses for your NFT art. They include:

  • Modifying the arts;
  • Using the arts to market or sell third-party products;
  • Using the arts in connection with images of hatred, violence, or other inappropriate behavior; or
  • Trying to trademark your arts, or otherwise acquire intellectual property rights in it.

Why does the NFT License matter?

Artists and creators traditionally have had two options:

  • Open source their work and relinquish all rights to it
  • Copyright their work, locking down their rights but severely restricting its reach

The NFT License offers a more practical middle ground. We hope the NFT License provides a framework for blockchain developers to establish sustainable businesses and offer them a secure path to monetization, much like the App Store did for early third-party developers.

We don’t know exactly what the future looks like, but we know everyone should have a say in it. The NFT License is a first step in determining what it will mean to own digital assets in the years ahead. We hope it will help spark new ideas, new businesses, and new ways of thinking.

The NFT License is a collaborative work in progress. We’re eager for feedback on improving it.

 

What am I allowed to do with the art associated with my NFT?

You have broad rights to use the art associated with your NFT. In the case of MaxCompose Arts, you can do any of the following:

  • Use the MaxCompose Arts for your own personal, non-commercial use;
  • Use the MaxCompose Arts when you’re on a marketplace that allows the purchase and sale of your MaxCompose Arts, so long as the marketplace cryptographically verifies that you are the owner;
  • Use the MaxCompose Arts when you’re on a third party website or app that allows the inclusion, involvement, or participation of your MaxCompose Arts, so long as the website/app cryptographically verifies that you are the owner, and the Kitty art doesn’t stay on the website/app after you’ve left; and
  • Use the MaxCompose Arts to commercialize your own merchandise, provided that you aren’t earning more than $100,000 in revenue each year from doing so.

 

What am I NOT allowed to do with the art associated with my NFT?

There are a few things that aren’t appropriate uses for your NFT art. They include:

  • Modifying the arts;
  • Using the arts to market or sell third-party products;
  • Using the arts in connection with images of hatred, violence, or other inappropriate behavior; or
  • Trying to trademark your arts, or otherwise acquire intellectual property rights in it.

 

What does “personal, non-commercial use” mean?

It’s personal, non-commercial use if you’re copying or using your NFT art in a way that doesn’t involve selling or using it (or trying to sell or use it) for commercial gain. Some examples of personal, non-commercial use include:

  • Printing a copy of your NFT art on a t-shirt or hat that you wear yourself, or give to a small group of friends;
  • Commissioning a famous painter to paint a special painting of your MaxCompose Arts, that you put on your wall at home; or
  • Making a video using your MaxCompose Arts, that you share with your family or a small group of friends.

 

What does “cryptographically verify” mean, and why is it important?

The goal is to make sure that you enjoy the full benefits of NFT ownership. First and foremost, that means making every effort to make sure that only the real owner of the NFT gets to use the art associated with it. We want any marketplace or third party site/app that incorporates NFTs to check to confirm that anyone placing art on that marketplace/site/app actually owns the associated NFT. They can do this by checking the blockchain record. This way, only you can use the NFT art you own!

 

Why can’t I modify the art of my NFT?

Just like your NFT, the art is unique. If anyone could simply change their own NFT to look like yours, that wouldn’t be cool. So, we ask that you don’t change your art to look like anyone else’s! If you want a NFT with different attributes, have fun creating it yourself the way the game intended!

 

Am I allowed to commercialize my art?

Yes, so long as you’re earning less than $100,000 in gross revenue per year as a result of your efforts. If you’re earning (or think you might earn) more than that, you’ll need to contact the creator of the NFT and negotiate a special commercial use license. This special license might include a revenue share, a royalty payment, or other applicable terms.

 

Why is there a restriction on how much money I can make using my art?

MaxCompose Digital Arts created the art of your NFT, and it’s likely a big part of their brand. Commercializing your art is exciting, but at the end of the day, businesses also need to have the right to make the big decisions about how the art gets used in a commercial setting.

We’ve tried to balance these interests by allowing you to make up to $100,000 a year off of your art, while we reserve to ourselves the right to make bigger deals to help our business grow.

 

How do you know how much I’m earning from my art? How will you enforce this rule?

For now, we’re operating on the honor system. We expect you to be honest, and to respect the fine balance we’re trying to create. If we discover that you’re not complying with the license in some way, we reserve the right to terminate the license. If that happens, while you’ll still own your NFT, you’ll lose the rights to use the art associated with it.

 

I want to create a new marketplace, website, or application that involves the purchase and sale of NFTs, or the inclusion, involvement, or participation of NFTs. Is that restricted, too?

There is no restriction. The revenue limitation in the license only governs people who are trying to commercialize their own art – not people who are trying to create new and unique experiences for MaxCompose art NFTs. We encourage you to create marketplaces, websites, and applications that involve the purchase, sale, inclusion, involvement, or participation of MaxCompose art NFTs!

Version 1.0

Last Revised: 01 Jan, 2022

0. Background; Instructions for Use.

The NFT License (this “License”) is built to support applications for blockchain technologies, and to help clarify a user’s rights in artistic overlays as the owner of a non-fungible token (“NFTs”).

MaxCompose Digital Arts (“MCDA”) created this License as an open-source resource for the wider community to encourage adoption of the ERC-721 standard. MCDA’s goal is to positively shape the future of NFTs for creators of blockchain-based art (each, for the purposes of this License, a “Creator”) by demystifying the associated user rights while empowering Creators to license their work at scale.

MCDA intends to use this License in each of its current and upcoming apps (including all MaxCompose Arts) to help ensure that NFT owners enjoy broad and meaningful rights in the art associated with their purchased NFTs. MCDA encourages other Creators to adopt this License as well.

When a Creator leverages this License, the Creator should replace the word “Creator” with the name of its company or organization and add a contact email in section 5. Other than the foregoing modification, MCDA does not permit other changes to this License. If a Creator wishes to make other changes to this License, it may not refer to the resulting license as the NFT License, or any variant thereof. Nothing in this License gives a Creator or any third party any rights in or to the names, marks, or logos of MaxCompose Digital Arts (including, without limitation, the right to use the “NFT License” mark), or in or to any intellectual property rights of MCDA, its subsidiaries or affiliates, all of which are expressly reserved.

1. Definitions.

“Art” means any art, design, photography and drawings that may be associated with an NFT that you Own.

“NFT” means any blockchain-tracked, non-fungible token, such as those conforming to the ERC-721 standard.

“Own” means, with respect to an NFT, an NFT that you have purchased or otherwise rightfully acquired from a legitimate source, where proof of such purchase is recorded on the relevant blockchain.

“Extensions” means third party designs that: (i) are intended for use as extensions or overlays to the Art, (ii) do not modify the underlying Art, and (iii) can be removed at any time without affecting the underlying Art.

“Purchased NFT” means an NFT that you Own.

“Third Party IP” means any third party patent rights (including, without limitation, patent applications and disclosures), copyrights, trade secrets, trademarks, know-how or any other intellectual property rights recognized in any country or jurisdiction in the world.

2. Ownership.

You acknowledge and agree that Creator (or, as applicable, its licensors) owns all legal right, title and interest in and to the Art, and all intellectual property rights therein. The rights that you have in and to the Art are limited to those described in this License. Creator reserves all rights in and to the Art not expressly granted to you in this License.

3. License.

a. General Use. Subject to your continued compliance with the terms of this License, Creator grants you a worldwide, non-exclusive, non-transferable, royalty-free license to use, copy, and display the Art for your Purchased NFTs, along with any Extensions that you choose to create or use, solely for the following purposes: (i) for your own personal, non-commercial use; (ii) as part of a marketplace that permits the purchase and sale of your NFTs, provided that the marketplace cryptographically verifies each NFT owner’s rights to display the Art for their Purchased NFTs to ensure that only the actual owner can display the Art; or (iii) as part of a third party website or application that permits the inclusion, involvement, or participation of your NFTs, provided that the website/application cryptographically verifies each NFT owner’s rights to display the Art for their Purchased NFTs to ensure that only the actual owner can display the Art, and provided that the Art is no longer visible once the owner of the Purchased NFT leaves the website/application.

b. Commercial Use. Subject to your continued compliance with the terms of this License, Creator grants you a limited, worldwide, non-exclusive, non-transferable license to use, copy, and display the Art for your Purchased NFTs for the purpose of commercializing your own merchandise that includes, contains, or consists of the Art for your Purchased NFTs (“Commercial Use”), provided that such Commercial Use does not result in you earning more than One Hundred Thousand Dollars ($100,000) in gross revenue each year. For the sake of clarity, nothing in this Section 3.b will be deemed to restrict you from (i) owning or operating a marketplace that permits the use and sale of NFTs generally, provided that the marketplace cryptographically verifies each NFT owner’s rights to display the Art for their Purchased NFTs to ensure that only the actual owner can display the Art; (ii) owning or operating a third party website or application that permits the inclusion, involvement, or participation of NFTs generally, provided that the third party website or application cryptographically verifies each NFT owner’s rights to display the Art for their Purchased NFTs to ensure that only the actual owner can display the Art, and provided that the Art is no longer visible once the owner of the

Purchased NFT leaves the website/application; or (iii) earning revenue from any of the foregoing, even where such revenue is in excess of $100,000 per year.

4. Restrictions.

You agree that you may not, nor permit any third party to do or attempt to do any of the foregoing without Creator’s express prior written consent in each case: (i) modify the Art for your Purchased NFT in any way, including, without limitation, the shapes, designs, drawings, attributes, or color schemes (your use of Extensions will not constitute a prohibited modification hereunder); (ii) use the Art for your Purchased NFTs to advertise, market, or sell any third party product or service; (iii) use the Art for your Purchased NFTs in connection with images, videos, or other forms of media that depict hatred, intolerance, violence, cruelty, or anything else that could reasonably be found to constitute hate speech or otherwise infringe upon the rights of others; (iv) use the Art for your Purchased NFTs in movies, videos, or any other forms of media, except to the limited extent that such use is expressly permitted in Section 3(b) above or solely for your own personal, non-commercial use; (v) sell, distribute for commercial gain (including, without limitation, giving away in the hopes of eventual commercial gain), or otherwise commercialize merchandise that includes, contains, or consists of the Art for your Purchased NFTs, except as expressly permitted in Section 3(b) above; (vi) attempt to trademark, copyright, or otherwise acquire additional intellectual property rights in or to the Art for your Purchased NFTs; or (vii) otherwise utilize the Art for your Purchased NFTs for your or any third party’s commercial benefit. To the extent that Art associated with your Purchased NFTs contains Third Party IP (e.g., licensed intellectual property from a celebrity, athlete, or other public figure), you understand and agree as follows: (w) that you will not have the right to use such Third Party IP in any way except as incorporated in the Art, and subject to the license and restrictions contained herein; (x) that the Commercial Use license in Section 3(b) above will not apply; (y) that, depending on the nature of the license granted from the owner of the Third Party IP, Creator may need to pass through additional restrictions on your ability to use the Art; and (z) to the extent that Creator informs you of such additional restrictions in writing (email is permissible), you will be responsible for complying with all such restrictions from the date that you receive the notice, and that failure to do so will be deemed a breach of this license. The restriction in Section 4 will survive the expiration or termination of this License.

5. Terms of License.

The license granted in Section 3 above applies only to the extent that you continue to Own the applicable Purchased NFT. If at any time you sell, trade, donate, give away, transfer, or otherwise dispose of your Purchased NFT for any reason, the license granted in Section 3 will immediately expire with respect to those NFTs without the requirement of notice, and you will have no further rights in or to the Art for those NFTs. If you exceed the $100,000 limitation on annual gross revenue set forth in Section 3.b above, you will be in breach of this License, and must send an email to Creator at [email protected] within fifteen (15) days, with the phrase “NFT License – Commercial Use” in the subject line, requesting a discussion with Creator regarding entering into a broader license agreement or obtaining an exemption (which may be granted or withheld in Creator’s sole and absolute discretion). If you exceed the scope of the license grant in Section 3.b without entering into a broader license agreement with or obtaining an exemption from Creator, you acknowledge and agree that: (i) you are in breach of this License; (ii) in addition to any remedies that may be available to Creator at law or in equity, the Creator may immediately terminate this License, without the requirement of notice; and (iii) you will be responsible to reimburse Creator for any costs and expenses incurred by Creator during the course of enforcing the terms of this License against you.

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