[Law firm Veat TIP] Top 8 reasons to enter into a Usage License Agreement

A well-written usage license agreement clarifies the rights and conditions for the use of intellectual property, protecting the creator’s rights and reducing the potential for disputes between creators and users. In addition, usage license agreements play an important role for creators in establishing a transparent trading environment and securing commercial value.  Therefore, usage license agreements are important in all situations involving the use or provision of intellectual property, and it is important to have a usage license agreement drafted through professional legal advice to ensure that all necessary items are included. 

What are the methods for a usage license (license) agreement valid worldwide and what precautions should be taken when using derivative works in relation to the creation of works related to NFTs?​
Regarding usage license issues in relation to NFT creation, it is very important. Generally, usage license agreements are only valid within a specified region for a specified period. However, in the case of NFTs, they can be sold and resold anywhere in the world, so a usage license that is valid permanently, both regionally and temporally, must be obtained.

What should be noted when using derivative works?
When utilizing derivative works, most websites offer royalty-free images and videos. In this case, the license conditions must be carefully checked. For example, commercial use may be prohibited, or attribution may be required. If attribution is required, the source must be recorded in the NFT or published metadata.

What are the key items that should be included in a usage license agreement?
A usage license agreement should include the following items: Licensed work, licensed product, contract region (here, ‘worldwide’ is appropriate), contract period, exclusivity, royalty rate, advance payment, minimum guarantee, and so on. All of these elements must be clearly stated in the agreement, providing important protection measures for both the rights holder and the creator.

How can legal risks be minimized when creating NFT works?
To minimize legal risks when creating NFT works, it is essential to accurately understand and comply with the license conditions. You must ensure that all necessary usage licenses have been secured, and that the contract terms are consistent with the manner in which the work will be used. In cases of uncertainty, it is advisable to seek advice from a legal professional.

Law firm Veat’s TIP team is led by Seungjong Oh, Attorney, who previously served as Chairman of the Copyright Committee, and Sung-ho Choi, Representative Attorney, who has been selected as a ‘Leading Lawyer’ in the TMT field of Legal Times, and Il-woon Ahn, Partner Attorney, who is actively engaged as a community specialist of the Korean Copyright Committee, and Yong-hwan Jeon, Senior Attorney, who has abundant experience in ICT regulatory sandbox and empirical service legal consulting. The team consists of professionals with combined expertise and practical experience to solve complex copyright and intellectual property rights issues. 

The Veat TIP team is providing easily understandable legal knowledge essential for creating NFT works through the  TIP team Copyright Legal Guide to minimize the legal risks of creators and protect their works. We will continue to introduce various copyright issues in the future, so please refer to them, and if you need professional legal consultation, please feel free to contact Law firm Veat.

Thank you.
Law firm Veat