Distributed Ledger Digital Asset Licensing System
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Solution Overview
Problem
Conventional asset licensing models restrict creative artists from incorporating licensable assets into their works without first paying license fees, and fail to compensate licensors based on the actual contribution of their assets to the creative work, leading to high costs and unfair revenue distribution.
Innovation Solution
A distributed ledger technology-based system that allows creative artists to use unlicensed assets freely until the work is finalized, dynamically calculates license fees based on the asset's contribution to the creative work, and automatically distributes royalties to licensors, using smart contracts to ensure transparent and immutable record-keeping.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If license fees are paid upfront before incorporating licensable assets into creative works, then licensors receive guaranteed compensation, but creative artists face high upfront costs and cannot create prototypes without payment
Solution Approach 1:
The system performs preliminary actions by allowing creative artists to incorporate licensable assets into creative works before license fees are paid. The distributed ledger records these incorporations, and license fees are calculated and paid afterward based on the actual contribution of each asset to the final creative work, eliminating the need for upfront payments while ensuring licensor compensation.
Solution Approach 2:
The system changes the parameter of payment timing from upfront to post-creation. Instead of requiring payment before asset incorporation, the system allows incorporation first, then calculates and collects license fees based on measured contribution percentages, fundamentally altering the financial workflow to benefit both artists and licensors.
2Reliability
If fixed license fees are charged for all uses of licensable assets, then licensors receive predictable revenue, but creative artists pay unfair amounts when assets contribute minimally to the final work
Solution Approach 1:
The system changes the license fee parameter from a fixed amount to a variable amount based on contribution percentage. The distributed ledger tracks how each licensable asset contributes to the final creative work, and license fees are calculated proportionally, ensuring artists pay fair amounts while licensors receive compensation matching their asset's actual value in the work.
Solution Approach 2:
The system replaces the manual or estimated assessment of asset contribution with an automated distributed ledger mechanism that objectively measures and records the contribution percentage of each asset to the creative work, eliminating subjectivity and enabling fair, dynamic fee calculation.
3Reliability
If creative artists must obtain licenses before using assets, then licensors maintain control over asset usage, but the licensing process becomes complex and time-consuming
Solution Approach 1:
The system performs the licensing action preliminarily by allowing asset incorporation before formal licensing. The distributed ledger automatically records the incorporation and generates licensing terms afterward, eliminating the need for pre-licensing negotiations and approvals while maintaining licensor control through automated smart contracts.
Solution Approach 2:
The system enables self-service licensing where the distributed ledger automatically tracks asset usage, calculates contribution percentages, determines license fees, and executes payments without manual intervention. This automates the entire licensing process, reducing complexity while maintaining control through programmable rules.
4Loss of information
If traditional licensing systems track asset usage manually, then detailed contribution records can be maintained, but the process is inefficient and prone to error
Solution Approach 1:
The system replaces manual tracking mechanisms with an automated distributed ledger that programmatically records asset contributions to creative works. This eliminates human error and inefficiency while maintaining accurate, immutable records of contribution percentages, enabling both high accuracy and high productivity simultaneously.
Solution Approach 2:
The distributed ledger acts as an intermediary between licensable assets and creative works, automatically tracking and recording contribution data. This intermediary mechanism ensures accurate record-keeping without requiring manual intervention from artists or licensors, significantly improving processing efficiency while maintaining data integrity.
Data Source
AI summary
A licensing system and related methods are described utilizing aspects of distributed ledger technologies to facilitate trusted and verifiable licensing transactions for creative works. A client device can include an asset editing tool for incorporating an asset selected from a plurality of licensable assets into a new creative work. The selected asset can be downloaded for incorporation into the new creative work. The new creative work incorporating the selected asset can be analyzed to determine an amount that the selected asset contributed to the new creative work, or an amount that the new creative work is attributable to the selected asset. Based on the analysis, a smart contract associated with the new creative work can be generated to include license fees for licensing the new creative work, receive payment transactions for licensing the new creative work, and fairly disperse calculated portions of received payment transactions to a licensor of the new creative work and to another licensor of the incorporated selected asset.