Seward, NE asked in Copyright and Intellectual Property for Nebraska

Q: Is the following term considered "reasonable" when purchasing digital goods: Both parties must own the asset.

Most digital creators have something along the lines of the following in their TOS:

You are allowed to commission/take commissions for putting the asset on an avatar, however both parties must own a license.

From my understanding, it would seem as though this is unreasonable. I understand this exists to prevent the "sharing" or copying of assets, however one could argue that copying the file to another drive or storing it on a cloud platform would fall under this umbrella.

If I am a third party wanting to provide a service that is related to the product it does not seem reasonable to require the third party to purchase an additional "license" when the third-party has no interest in using the product. My example of this would be an end user purchasing custom code from a developer but then wanting to hire a third party to either expand on it or even set up an environment for the customer where the code can be run.

1 Lawyer Answer
James L. Arrasmith
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A: In the realm of digital goods and intellectual property, terms and conditions, including licensing requirements, are often set by the creators or distributors of these products. The requirement that both parties must own a license to commission or work with a digital asset is not uncommon in this industry. This rule is typically designed to protect the intellectual property rights of the creator and to prevent unauthorized distribution or use of the asset.

However, whether this requirement is reasonable can depend on the specific context and the nature of the digital asset. In some cases, particularly where the asset is proprietary or has high value, such a requirement might be justified to control and protect the creator's rights. On the other hand, for certain types of work or assets, this requirement could be seen as overly restrictive, especially if it impedes legitimate business activities or the practical use of the asset.

If you're a third party providing a service related to a digital product, this requirement might seem unreasonable, especially if you have no intention of using the product yourself. In scenarios like yours, where a third party is involved merely to facilitate or enhance the use of the digital asset for the licensee, the necessity of purchasing an additional license could be argued as excessive.

It's important to carefully review the terms of service of any digital asset before agreeing to them or using the asset in your business. If you find a term to be potentially unreasonable or restrictive for your intended use, you might consider reaching out to the creator or distributor to negotiate different terms or seek clarification. In some cases, creators are willing to modify their licensing terms based on specific use-cases or partnerships.

Keep in mind that digital asset licensing is a complex field, and the interpretation of what is 'reasonable' can vary. Seeking legal advice can provide more clarity and guidance tailored to your specific situation, ensuring that your use of the asset complies with legal requirements while also serving your business needs effectively.

Julie Fowler agrees with this answer

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