Olga Plyasunova

Head of Trademark Department / Trademark Attorney Reg. № 1258 / Patent Attorney of the Russian Federation / Eurasian Patent Attorney Reg. № 63

05 August 2019

The monetization of the intellectual property rights with the use of digital space

The commercial markets in digital space are a popular and progressively developing field of the commodity-money relations. The benefits of the e-commerce are obvious to all participants of the legal relations: thanks to the digital commerce, entrepreneurs and consumers save time, money and efforts.

Despite the fact that almost any trade subject matter contains a result of the creative labour or the means of individualization, while discussing the issue of monetization of the intellectual property rights, it will be correct to consider the methods for gaining profit directly on the use of the latter, rather than on the material embodiment of the results of the intellectual labour.

Monetization as a source of incomes

Perhaps, due to the fact that the term “monetization” does not cause obvious problems for the definition, there is not a clearly formulated, corresponding to the current situation of the market relations description of the term in the scientific literature. The description of “monetization” as “... a use (of something valuable) as a source of profit” can be considered as appropriate, but brief.[1]

Taking into account a real state of affairs, “monetization” should be defined as: an activity related to gaining income as a result of the sale or use of any subject matter, or an action to establish the valuableness of the subject matter in a monetary equivalent.

Monetization of the intellectual property rights

The modern inventors and rights holders of intangible assets are the owners of a huge potential for a profitable use of the results of the intellectual labour and the means of individualization. An unbounded space of the digital market and the absence of the need to be bounded to a territorial subject matter make it possible to make commercial offers to an unlimited number of persons.

Depending on the nature of the use of the intellectual property rights, it is possible to distinguish the following methods for monetization:

  1. Gaining profit directly on the transfer or assignment for the temporary use of the exclusive rights to the subject matters of intellectual property. In this case, the right holder using the electronic networks finds the persons wishing to obtain the right to the use of the subject matters of intellectual property. There are a number of services that facilitate the process of monetization using this method, which consist of the electronic registers of intellectual property, where the future users can obtain the information about the patented subject matters and the right holders of the exclusive rights.
  2. Monetization gained from the collateral processes accompanying the use of the results of the intellectual activity. Most often, this method for monetization is used in relation to the subject matters of the copyrights and the related rights. An audiovisual work is created, which is published on the Internet to be freely available. After reaching a certain level of popularity, the copyright holder publishes a third party advertising gaining profit on it. Thus, income is generated not so much on the use of the exclusive rights, but on increasing the recognition of the product or the customer of the advertising clip.
  3. Crowdfunding. This method refers generally to the investments in the material expression of the results of the intellectual labour, rather than to gaining direct profit. The meaning of crowdfunding is in the public voluntary investment of any project by third parties. Fundraising for publishing a book, shooting a film, launching a manufacture of a new product. At the same time, no one excludes further gaining profit by the right holder as a result of the use of the exclusive rights belonging to him and their material expression. The voluntary investments in the development and creation of such subject matter of intellectual property as an electric wheel for bicycles are considered to be one of the striking examples of crowdfunding. As a result of the announced fundraising, the creators of the invention received for the implementation of the project the amount of 150 thousand dollars, which was twice higher than what had been originally announces.[2]

The risks associated with monetization of the intellectual property rights in digital space

Despite the advantages of monetization that objectively present in the electronic networks, such as the absence of the territorial bounds, the reduction of the economic and labour costs, it is worth remembering that in addition to the bona fide users, there are also the violators on the Internet space, who also use the advantages of the electronic networks, but for their own purposes. The violators can use other people's results of the intellectual activity and the means of individualization without consents of the right holders; therefore, when monetizing the intellectual property rights in digital space, it is necessary to pay attention to their protection and defence from the illegal use.

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