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title: Forgotten Runes NFT Holder Commercial Rights

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# Forgotten Runes NFT Holder Commercial Rights

Forgotten Runes NFT holders can commercialize the characters in the NFTs they hold. This document describes the details of what that means. 

> **DRAFT 2/16/22**
> 
> This is a draft version of the commercial rights blog post. We're working on an accompanying legalese version as well.

## Motivation

The point of Forgotten Runes is to create a collaborative legendarium which means everyone who owns a Wizard (or Soul, Warrior, Pony, etc.) NFT owns their **character**, uniquely theirs forever - to build on, to tell the story of, and even to commercialize. 

We (Magic Machine) also are developing the world and character stories through Lore writing, comics, games, and an upcoming show (we've [signed a development deal w/ Titmouse](https://www.forgottenrunes.com/posts/titmouse) and we've started production on a trailer).

Decentralized intellectual property is a new concept and thoughtful commercial rights needs to balance the needs of:

- Wizard holders individually
- Wizard holders as a community
- Aspiring Wizard Holders
- Magic Machine
- Large commercial entities

We want to encourage the creation of Cult Content of any resolution: from indie pixel art to large scale works like a show.

That means our rights need to be:

* permissive enough to allow anyone to contribute
* predictable enough to give a clear path to large-scale success
* protective enough to keep the broader community's interests in mind
 
## Forgotten Runes Commercial IP Rights

Here's how it breaks down:

* Everyone - Creative Commons, Non-commercial (CC BY-NC)
* Wizard Holders - Cult Commons, Royalties after $5mm (cc5m)
* Bespoke - Negotiable custom commercial rights

### Everyone - Creative Commons, Non-commercial (CC BY-NC)

Everyone can use Wizards and the Runiverse with the [Creative Commons non-commerical license](https://creativecommons.org/licenses/by-nc/4.0/).

You don't have to hold a Wizard to do this.

What this means is as a non-holder:

* ✅ Create artwork about Runiverse and it's characters
* ❌ Sell a commercial work about the Runiverse characters _without_ the owner's permission
* ✅ Sell a commercial work about a Runiverse character _with_ the owner's permission

### Wizard Holders - Cult Commons, $5mm (cc5m)

Wizard Holders: Non-exclusive commercial rights to the characters in the NFTs that you hold (while you own the token). 

No revenue cap (make as much money as you want). Royalty-free up to $5mm per organization.

After $5mm the _blanket_ royalties are 20%: 10% to magic machine and 10% to the community DAO (forthcoming). 

However, **bespoke licenses available** to likeminded organizations (read: "cheaper royalties").

> Note: "royalties" here are referring to royalties-owed as a result of commercialization of the _IP_ of your tokens and _not_ the royalties paid on trading the token on a secondary marketplace such as OpenSea or Looksrare.

The idea here is that, even without further negotation you have a predictable model for licencing the IP, even if you are wildly successful. 

While at the same time, the blanket royalties give motivation for larger players to "come to the table" to negotate and return value back to the community.

### Bespoke

If you want to use the IP of Wizards and the Forgotten Runes Universe at a large scale or in a custom way, you can contact us and we're happy to chat. 

For example if you:

* Want to create a videogame or a show that uses a lot of characters that you don't own
* Want to create a derivative NFT project 
* Want to create a line of merch of items from the Forgotten Runes universe
* etc...

Then reach out. We want to make these things happen. 

For example, a merchandising deal that has hard goods costs might find 20% royalties too high: then reach out and we can negotiate.

A derivative NFT project might be so likeminded that we grant a license for little-to-no royalties at all. Again, reach out.

Our mission is for the stories of Forgotten Runes to be told in all expressions and we want to make it easy for that to happen.


## FAQ

Q: **What does _non-exclusive_ mean?** 

A: It means that Magic Machine can also use your Wizard e.g. in our stories. It allows MM to build and negotiate on behalf of the community.

Why? Because, for example, Netflix execs aren't going to join Discord and negotiate rights with each individual Wizard holder. "Non-exclusive" means that Magic Machine can be a single point of negotation for outside organizations.

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Q: **If Magic Machine uses my Wizard commercially, do they owe me royalties?**

A: The non-exclusive commercial license means Magic Machine retains rights to create our own commercial derivative works of any Wizard.

We are creating a show, comics, etc. and we believe that negotiating rights with each individual holder for every expression would add too much friction to our ability to tell stories about the Runiverse.

That said, we have a social obligation to handle the Wizard characters in a careful way, which could theoretically include some sort of royalty at our discretion, pending a proper legal and regulatory framework. 

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Q: **Do I own other people's renditions of my Wizard?** 

A: No. For example, if Carol The Creator paints a picture of your Wizard, Carol owns that _painting_ as her creation. 

Magic Machine cannot grant you any rights (commercial or otherwise) to Carol's paintings. Only Carol can do that.

Similarly, Magic Magic does _not_ have any automatic commercial rights to a holder's interpretations or developments of their own characters.

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Q: **Why is there a _cap_?** 

A: There isn't a cap. There is no limit to the amount of revenue you're permitted to earn. There is, however, a threshold afterwhich a royalty, as a percentage of revenue, is owed back to the creators and community.

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Q: **What does it mean that the royalty threshold is _per organization_?**

A: It means that the royalty threshold is not _per Wizard_, but rather depends on the total revenue generated by the Forgotten Runes IP for that company (or individual), regardless of if they commercialize 1 Wizard or 100.

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Q: **Why is the threshold _per organization_?** 

A: $5mm per organization means nearly all individuals can commercialize to an extremely high volume without friction, but very large players need to come to the negotiating table.

The threshold provides a hedge of protection to help prevent an adversarial situation where a large organization (studio, etc.) might buy a small handful of Wizards and create a work with no input from the creators or existing community. 

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Q: **What if I sell my Wizard?** 

A: If you sell your Wizard then we (MM) no longer grant you a commercial right to the character and that right is transferred to the new holder.


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Q: **Can I license my Wizard for someone else to use commercially (merch etc.)?** 

A: Yes. Feel free to team up with groups of Wizards to commercialize together. 

Note that the aggregating company is still subject to the $5mm per organization royalty threshold.

