IP Tokenization Guide
A guide for researchers and universities to tokenize their IP in partnership with a BioDAO
Below is a guide on how to tokenize an IP-NFT as a researcher or university. If you are unfamiliar with IP-NFTs or IP Tokens, we highly recommend you read over those sections before proceeding. This guide will go over the logistics of tokenizing an IP-NFT to further fundraise for the research originally funded by an IP-NFT. In short, tokenizing an IP-NFT into IP Tokens means that the rights of a research program were originally held by a single entity (a DAO), and IP Tokens are the decentralization of those rights directly to individuals. The IP Token holders will have governance rights over the research, and selling IP Tokens via a Crowdsale is an effective way to raise funding for the research.
- 1.Data Room: Coordinate with the DAO project lead to create a data room. Here is an example data room from VITA-FAST, the tokenization of the VitaDAO IP-NFT supporting Viktor Korolchuk's research at the University of Newcastle. Ensure all the data included in the data room is blinded or obfuscated to minimize the risk of IP leakage.
- 4.Lab Tour: Though not required, a lab tour is an effective way to bring the community closer to your lab and research. We suggest highlighting the work and team that will be funded, as well as the instruments that will be used to conduct experiments.
- 6.Create a wallet: If the researcher will be receiving IP Tokens, those tokens will need to be held in a wallet connected to the Ethereum blockchain. We suggest holding them in a non-custodial wallet such as Metamask or Rabby. You will have to share your wallet address (0x...) with the DAO so they can send the IP tokens to the correct wallet.
- 1.Get approval: Whether you are at a university or a private lab, legal approval for IP tokenization is the first requirement. To help de-risk the opportunity for your research organization, the following articles may be useful collateral for convincing key decision makers.
- 2.Create a wallet: If the research agreement between the DAO and the research organization states that the research organization has an ownership stake in any IP that comes from the research, then the research organization should expect to receive IP tokens. The IP tokens will need to be held in a wallet connected to the Ethereum blockchain. We suggest holding them in a multi-signature wallet such as SAFE. You will have to share your wallet address (0x...) with the DAO so they can send the IP tokens to the correct wallet.
Q: Is ownership of the IP/results defined wholly by who controls the wallet the IP-NFT is in?
A: The scenario of multiple IP owners presents complex challenges. In order to streamline this process, there is a singular owner designated as the holder of the IP-NFT, who is responsible for the distribution of governance rights pertaining to the licensing function of the IP. This strategy ensures a more efficient and less convoluted management of IP rights and licenses.
Q: The future model involves scientists directly minting and selling IP-NFTs to raise research funds – how will this work where IP belongs to the institution and not the individual scientist?
So long as research happens at universities or private labs, that is where the IP must be licensed. Even in the case that a researcher is being funded directly, a legal entity is the likely owner and counter-party for any IP licensing agreements.
Q: What due diligence will be in place to ensure the party minting an IP-NFT has rights to transfer ownership?
This is the burden of the licensee. However, validating IP ownership and ensuring the IP is truly owned by the minter of an IP-NFT is a service that can be provided by Molecule. Until IP is enforced entirely on the blockchain, there will always have to be some degree of manual diligence required.
Q: If sending the IP-NFT to another party, does the other party need to sign some sort of agreement in addition to just holding the IP-NFT in a wallet they control to take full legal ownership?
Just holding the IP-NFT is sufficient to be assigned the rights to the IP. That said, an unlawful transfer (e.g. someone steals the IP-NFT) would still be invalid.