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Digital Asset Royalty

Discussion in 'Copyright, Trademark, Patent Law' started by Ace85, May 2, 2021.

  1. Ace85

    Ace85 Law Topic Starter New Member

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    Jurisdiction:
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    Hello,

    I bought a digital asset know as land that was to be contributed to a district in a virtual space. The district set up a company and entered into an agreement that district controlled land would operate and give a royalty to contributors.

    This land was then grouped up and given to the district under the impression contributors would still receive compensation.

    The owner of this district is now ignoring the agreement as he says royalties cannot be paid as he now owns the asset.

    Is this true?
     
  2. adjusterjack

    adjusterjack Super Moderator

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    Sure. It's certainly true that he said it. However, since we can't read your contract, we can't comment on whether there is a breach. Upload it if you like, redacting an identifying information.
     
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  3. Ace85

    Ace85 Law Topic Starter New Member

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    But is it true that you cannot pay a royalty on an asset you own even if you agreed to if given the asset?

    Like how does an angel investor collect a royalty when giving funds to a company?
     

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  4. Tax Counsel

    Tax Counsel Well-Known Member

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    Very generally royalties are amounts paid for the use of property, especially for the use of intellectual property or for the right to take natural resources from land (e.g. mining and gas royalties). It's not unlike a tenant paying rent to the owner of property to live on the property. In all those cases, the rents or royalties are paid to the owner of the property for its use; it doesn't make sense for the owner of the asset to pay royalties to someone else for his use of his own property.

    As to the obligation of the company involved here to make payments to the contributors of this digital "LAND", that is governed by the agreement you have and in reading it, I can tell you it is not all that well drafted and it purports not to guarantee anything to the contributors. I suggest you have the agreement reviewed by a contract attorney in your state to see what are entitled to receive out of this.
     
  5. Zigner

    Zigner Well-Known Member

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    You are going to want to take your agreement to an attorney for a full review. Contract review of this type is beyond the scope of this forum.
     
  6. Ace85

    Ace85 Law Topic Starter New Member

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    Well we purchased the land on behalf of the district with currency. It isn't like we owned the land at any point (it was always in decentraland control). There was a startup plan (the agreement) and people bought into it with the digital currency. The original team stepped down and this guys showed up with the attached agreement. You could either retain control of your land or continue with it going to the district with the licensing agreement in place.

    This would essentially be like an angel investor giving money to a company to buy land for a royalty.

    If this person knowingly induced that a payment would made to contributors with no intent of ever paying anything, is that not fraud?
     
  7. Zigner

    Zigner Well-Known Member

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    I believe that answers (one provided by an attorney) were already given.
     
  8. Tax Counsel

    Tax Counsel Well-Known Member

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    Except that in that case the term royalty wouldn't be technically correct. And it might not be the right term in your deal, either. Nevertheless, the contract would be interpreted with what the intent was, and where a investor is promised some kind of return payment for his investment, regardless of what you call it, the investor is entitled to what was promised in the deal.

    Yes, if you can prove that.
     
  9. adjusterjack

    adjusterjack Super Moderator

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    I read the agreement and I'm confused about something.

    Does any of this "land" exist as a geographical part of the planet Earth where one can walk on it and feel the ground beneath one's feet?

    If not, it seems that this is a convoluted cyber scam to separate fools from their money.
     
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  10. zddoodah

    zddoodah Well-Known Member

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    Huh? "[D]igital asset know as land"? What does that mean? What sort of "district" are you talking about? What "virtual space"?

    Under the impression? Is there a written agreement that says you'll receive royalties or some other compensation?

    How should we know? No one here has ever read any written agreement that might exist (I'm not going to take the time to read through your 13-page small font document, but I did quickly skim it, and it doesn't clarify what's happening here), and you haven't described any agreement with anything approaching clarity.

    I can pay anything I choose (as long as I have the money to pay).

    Huh?
     
  11. Ace85

    Ace85 Law Topic Starter New Member

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    It is digital land. It is worth quite a bit actually
     
  12. Ace85

    Ace85 Law Topic Starter New Member

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    Land in a virtual space (DCL). We are named a licensor in the agreement and to be paid 1/n of contributions of operating income.

    Even included an example in the agreement

    ROYALTY - ABC LAND Holdings, LLC to LAND Contributors โ—‹ The approximate royalty payment per pooled District managed land would be $380,000 divided by the number of pooled District-managed LANDs. โ—‹ For illustration purposes, if there are 1200 pooled District-managed lands, the per-Land royalty would be $380,000 / 1200 = $316.67 โ—‹ Note that the actual amount would be higher or lower based on operating income and number of pooled District-managed lands

    It is an plan that was submitted and voted on for approval. If approved, land is transferred to the district from DCL. If it is not approved the district is dissolved and contributors receive the land. Essentially we paid their digital currency for the district to have land.

    My comment of not owning the land was because it seemed to imply we were getting royalties on land that ABC now held. Which isn't the case
     
  13. adjusterjack

    adjusterjack Super Moderator

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    It sure looks like a scam to me.

    Maybe you should hire an imaginary lawyer to go after the money you invested in imaginary land. :rolleyes:
     
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  14. Ace85

    Ace85 Law Topic Starter New Member

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    We are probably getting scammed by the district leader, which is why I am on here.

    As far as the imaginary land, It is a digital asset.

    The market cap of the project is 2 billion US, with real world companies investing and renting out these imaginary lands
     
  15. adjusterjack

    adjusterjack Super Moderator

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    I understand the concept. Like any get-rich-quick "investment" there's an excellent chance of losing your money. If the district leader is in breach of contract or committing fraud, you sue him. It's that simple. Consult an attorney who specializes in these kind of investment schemes.
     
  16. Ace85

    Ace85 Law Topic Starter New Member

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    Yes i knew the risk. Quick question.

    Would a statement like this allow this leader to modify the contract in every way

    "This document does not attempt to be a comprehensive long-term roadmap, and details outlined herein may be amended by the leadership in order to ensure the most favorable outcome for the district."

    From my understanding anyone is technically allow to suggest an amendment but it still needs to be agreed upon by the parties involved. Is this not the case?
     
  17. PayrollHRGuy

    PayrollHRGuy Well-Known Member

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    That phrase would seem to say "the leadership" may amend the details.
     
  18. adjusterjack

    adjusterjack Super Moderator

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    I have no idea. It's vague and taken out of context.

    Again, if somebody has done you wrong, see a lawyer.
     
  19. Ace85

    Ace85 Law Topic Starter New Member

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    But to what degree? Just cancel anything in the agreement they do not like? Like loyalties to the Licensor or who the Licensor is?
     
  20. Zigner

    Zigner Well-Known Member

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    You will need to look to the contract to determine that. An attorney is what you need.
     

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