Blockchain-mediated Licensing: Legal Engineering for Artist Empowerment

Abstract

Licensing is one of the essential means of exploiting the monetary value of a musical work, and yet it is an area fraught with many issues and transactional costs which make it a difficult process for individuals and organizations. Many issues in music licensing arise from the legal complexity (e.g., national and international copyright law), business complexity (authentication, tracking, accounting, etc.), value web complexity (transparency of relationships among stakeholders), and technical complexity (e.g., establishing a global repertoire database for music, sufficient metadata standards) of working with music. Then, in addition to these issues, there are specific transactional costs (identification, negotiation, monitoring, and enforcement) associated with the licensing process. To mitigate the complexity and transactional costs associated with music and the licensing process, researchers and technologists have been investigating how new technologies and design models from the Web3 space, such as blockchain, linked data and Ricardian Contracts, can automate processes to reduce complexity, speed up payments, improve tracking, and provide other benefits in the music industry. In our report, we make our own attempt to reduce the complexity and transactional costs in the licensing process by developing an automated music license. In doing so, we first conducted a literature review synthesizing the intersection of music complexity and Web3 technologies to provide background and context to automating music licensing. Then we developed the Practical Tokenized Drafting (PTD) method, a set of core principles and practices for drafting Ricardian Contracts that interact with Web3 technologies (RC-Web3 Templates), and the Tokenized Music License (TML), an RC-Web3 Template standard form for music licensing on the OpenLaw platform. Both the PTD and TML can be adapted to meet the needs of music industry stakeholders and provide guidance to legal practitioners in drafting RC-Web3 Templates.