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When it Comes to Intellectual Property, You Need to Know What You’re Buying and What You’re Selling

Intellectual Property

Recently, an NFT collective called Spice DAO purchased a rare and early edition copy of the book Dune, by Frank Herbert. After shelling out €2.66 million ($3.04 million USD), the group announced their ambitious plans to (a) make the book public; (b) produce an animated series inspired by the book; and (c) support authors and artists who want to make other derivative projects based on the book.

The only problem with these plans is that buying an early edition of the book does not confer any copyrights whatsoever. Unfortunately, Spice DAO made a common but costly mistake by not consulting an experienced intellectual property attorney to guide them through their purchase and help them understand what they were…and were not…buying. In order to do any of the things they want to do, Spice DAO would have to negotiate a purchase or a license of the underlying copyright in Dune, which is currently owned by The Herbert Limited Partnership.  

I don’t highlight this bungle to make light of this group’s mistake, but rather to point out that even a sophisticated NFT collective worth millions of dollars can get caught in the many traps and misconceptions that abound in the world of intellectual property. Over the course of my career in IP, I’ve been brought on to help clean up the honest but costly mistakes of nascent entrepreneurs and Fortune 500 companies alike. The root cause of all such mistakes is that they didn’t loop in experienced IP counsel early enough to provide proper guidance.  

On the flip side of this purchasing mishap, I have also counseled regretful sellers who thought they were merely selling some of their business assets but later learned they had actually sold valuable copyrights or trademarks that they intended to keep for themselves or otherwise signed a contract preventing them from exploiting those assets as they had intended. These mistakes are all too common, considering how preventable they are. An experienced attorney could have counseled these buyers and sellers throughout the transaction to provide due diligence and sound advice and ensure all parties understood exactly what they were buying and what they were selling.  

Outside of the transactions space, there are also common pitfalls that bedevil businesses as they create and invest in their own IP, whether it’s the company’s brand and public image or proprietary software code. For instance, I have helped many clients navigate the expensive territory of IP disputes and litigation, which often arise after a business invests lots of money in a trademark through marketing and advertising, only for their business’ success to alert a more senior trademark owner to possible infringement. The more money a company invests in its brand image, the more likely it is for senior trademark owners to suddenly become aware of the company’s existence and send a cease & desist letter.  

As any good doctor will tell you, an ounce of prevention is worth a pound of cure. That old adage is equally applicable to intellectual property. At The Geller Law Group, we have experienced attorneys who can help with the prevention or the cure, but for your company’s bottom line it’s always better to loop us in on the prevention side as soon as possible.  

And what does a good prevention plan look like?  It looks like an attorney review of important business contracts, including client services agreements, independent contractor agreements, and NDAs. It looks like having your attorneys conduct proper due diligence and counseling during transaction negotiations and closings. It looks like obtaining a trademark clearance search and filing a federal trademark application before investing in your company’s brand identity and awareness.  

The important thing to keep in mind for any business owner is that it’s never too early to bring in experienced IP attorneys to make sure you’re creating, buying, selling, and investing in your own IP properly and securely. If you’re looking for more peace of mind surrounding your personal or business IP portfolio, contact us to make an appointment with one of our IP professionals and mention this post. 

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