Model NFT License Terms – Commercial Use and Derivative Works Permitted

Last Updated: May 26, 2022

MODEL NFT LICENSE TERMS 

MNFT Commercial Use and Derivative Works Permitted License

By purchasing or otherwise obtaining a blockchain-based non-fungible token created by _____________ (collectively, “Creator”) (“Token”), either through an initial transfer from Creator or a subsequent transfer from the prior owner of the Token, you agree to these NFT License Terms by and between you and Creator (the “Terms”) and you affirm that you are of the legal age of majority in your jurisdiction to enter into these Terms (or, if you are not, that you have obtained parental or guardian consent to enter into these Terms).

1. The Token is created by or on behalf of Creator and is specifically associated with one or more works of authorship created by Creator or its affiliates (the “Creative Work”) such that, if you own the Token, you can access such Creative Work through the Token pursuant to these Terms. It is important to understand, and you hereby acknowledge and agree, that the Token is separate from the Creative Work. Although the Token itself is sold or otherwise transferred to you, the Creative Work associated with the Token is licensed to you, and not sold or otherwise transferred to you.
2. Subject to your compliance with these Terms, Creator hereby grants to you, to the extent of its respective rights in the Creative Work, and solely for so long as you are the legal owner of the Token, a non-exclusive, non-transferable, license to access, use, copy, create derivative works of, perform and/or display (including publicly, as long you are the owner of the related Token) the Creative Work associated with the Token, including for your commercial use. This license is non-sublicensable, provided, however, if you create a derivative work based on the Creative Work in accordance with this license, you may sublicense rights in such derivative work for so long as you are the legal owner of the Token. For clarification, this license does not permit you to create, or authorize others to create, new tokens associated with the Creative Work or works derived therefrom.
   1. As examples, the license granted above would permit you, for so long as you are the legal owner of the Token and subject to applicable laws, to do each of the following:
      1. display the Creative Work and/or any derivative works thereof as your profile picture, on a social media platform, in a gaming application or experience, or on any other platform, website or application;
      2. use the Creative Work and/or any derivative works thereof as a logo or brand for purposes of marketing and/or promoting a business, organization, community, event, product or service;
      3. sublicense the Creative Work and/or any derivative works thereof to another person or entity, including for purposes of marketing or promoting such person or entity’s business, organization, community, event, product or service; and
      4. create and sell physical merchandise that displays a copy of, or image from, the Creative Work and/or any derivative works thereof, (such as t-shirts, coffee mugs, hats, plush toys, etc.), provided that you are responsible for obtaining any rights required from third parties in connection with such merchandise (e.g., you juxtapose an image from the Creative Work alongside an image owned by a third party).
   2. Except for the license granted above, Creator and its affiliates retain all right, title and interest in and to the Creative Work.
   3. You hereby covenant not to sue Creator and its affiliates, and its and their designees, licensees (including subsequent owners of the Token) and sublicensees, in connection with any use or other exploitation of any works (including any merchandise or other products) that may be similar to the Creative Work or any works derived therefrom, and you hereby release such entities from any such claims.
3. In connection with the Creative Work, you may not, or attempt to, or permit or enable any third party to use the Creative Work, or any work derived from the Creative Work, in a manner that suggests or implies any form of association, approval or endorsement by Creator or its affiliates where none exists.
4. The Creative Work may incorporate intellectual property, including copyrighted materials, trade names, trademarks or service marks, and the names, likenesses or images of Creator or individuals or entities associated with Creator (the “IP”). As between you and Creator, such IP is owned by Creator and/or its affiliates. Your use of such IP is subject to the license granted above, and you may not use any such IP in any manner that is likely to cause confusion or dilute, blur or tarnish such IP. All use of such IP, including any goodwill generated by such use, shall inure to the benefit of Creator and/or its affiliates.
5. You must retain the following to the extent it is provided by Creator as part of, or along with, the Creative Work: (a) identification of Creator and any others designated to receive attribution and (b) a copyright, trademark, or other intellectual property notice. Other than your compliance with the foregoing obligation, you have no right to use Creator’s name or any trademarks, logos, or other IP rights.
6. THE TOKEN IS INTENDED FOR CONSUMER ENJOYMENT, USE AND CONSUMPTION ONLY. IT IS NOT A “SECURITY,” AS DEFINED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED, THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED, OR THE SECURITIES LAWS OF ANY U.S. STATE.
7. You may sell or otherwise transfer the Token to a third party, provided that the following conditions are met:
   1. such sale or other transfer must be cryptographically verified (i.e., proof of such sale or other transfer must be recorded on the relevant blockchain);
   2. such sale or other transfer must comply with (i) any applicable terms of the marketplace or other platform on which such sale or other transfer takes place and (ii) any applicable laws, regulations and rules; and
   3. prior to such sale or other transfer, you must ensure the transferee has had the opportunity to review the then-current version of these Terms (i.e., that these Terms have been provided to the transferee or are readily available and easily identifiable on the Creator’s website or other platform) such that the transferee obtains the Token subject to these Terms.

Upon any sale or other transfer of the Token, your license to the Creative Work will immediately terminate (without the requirement of notice); this will be true even if the transfer of the Token occurs without your consent, such as in connection with a hacking incident, so you should take steps necessary to prevent the risk of a non-consensual transfer. Your license to the Creative Work will also immediately terminate (without the requirement of notice) if you breach these Terms. For the avoidance of doubt, upon the sale or other transfer of the Token, or the termination of your license to the Creative Work and any derivative works thereof, you must immediately cease any and all uses of the Creative Work and any derivative works, even if a particular use began prior to such termination.

You acknowledge and agree that Creator or its designee(s) may receive royalties or other compensation from your sale of, and any other future sale of, the Token via a smart contract embedded in the Token.

8. CREATOR PROVIDES THE TOKEN, AND LICENSES THE CREATIVE WORK, TO YOU ON AN “AS IS” BASIS, AND EXPRESSLY DISCLAIMS ANY WARRANTIES OR CONDITIONS OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OR CONDITIONS OF TITLE, NON-INFRINGEMENT, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT WILL CREATOR OR ITS AFFILIATES BE LIABLE FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL OR OTHER NON-DIRECT DAMAGES OF ANY KIND, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE MAXIMUM AGGREGATE LIABILITY OF CREATOR AND ITS AFFILIATES FOR ALL DAMAGES AND CAUSES OF ACTION, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, SHALL BE ________ U.S. DOLLARS ($________).
9. You shall defend, indemnity and hold harmless Creator and its affiliates from any third-party claim or action arising from (a) your breach or alleged breach of these Terms; (b) any unauthorized use of the Creative Work and/or any works derived from such Creative Work; or (c) any commercial use of the Creative Work and/or any works derived from such Creative Work.
10. The laws of the State of __________, excluding its choice of law provisions, will govern these Terms and any dispute that arises between you and Creator. All disputes related to these Terms, the Token or the Creative Work will be brought solely in the federal or state courts located in __________, United States, and you consent to personal jurisdiction and waive any objection as to inconvenient forum.
11. These Terms do not, and shall not be construed to, create any partnership, joint venture or agency between you and Creator. If any provision of these Terms is found to be unlawful, void or for any reason unenforceable, that provision will be deemed severable from these Terms and will not affect the validity and enforceability of any remaining provisions. You shall not assign, transfer or otherwise dispose of these Terms (including any of your rights or obligations under these Terms, excluding any rights that are expressly sublicensable hereunder, subject to any restrictions imposed on such sublicense rights), and any purported assignment, transfer or other disposition shall be null and void. These Terms constitute the entire agreement between you and Creator with respect to the Token and the Creative Work and supersedes all prior or contemporaneous written or oral agreements or understandings between you and Creator relating to the Token or the Creative Work.