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An Initial Copyright Offering (I©O) is a method of financing [[software]] projects. It was first employed to fund the development of [[blockchain]] applications and is a type of token generation event similar to an [[initial coin offering]] (ICO). The first I©O was conducted by [http://bit.ly/2VwPHbz Privé Trust] from Hong Kong to finance the development of the Privé software platform.
== Legal innovation ==
I©O is a legal innovation that enables software authors to partially or entirely sell the [[copyright]] of software at any stage of development to a potentially large number of customers. Funds that are raised by the sale of copyright can then be used to finance the software development effort.
The innovation was made possible by the emergence of [[blockchain]] technology. In the process of an I©O, the copyright is tokenized (i.e., presented as cryptographic tokens that are transferable on blockchain), and such tokens then represent [[Fractional ownership|fractional undivided interest]] in the copyright.
Fractional undivided interest in the copyright enables the owner to use the software, to create [[derivative work]], and to [[license]] the use of software to third parties. Each copyright owner is obligated to account to other copyright holders for any profits earned from licensing or use of the copyright. This obligation to account for profits is not set by a contractual obligation between copyright holders; instead, it comes from the general principles of law governing the rights and duties of co-owners<ref>http://bit.ly/2La6OvL>.
Each owner has a right to use and commercially exploit the object of the copyright, regardless of how large or small their share is in this intangible asset. It is important to note, however, that the amount of realized income from any commercial use of the copyright to which a person is entitled is proportional to the amount of copyright they own. In this way, there is an economic incentive for people to secure a larger percentage of the copyright ownership.
Without the application of blockchain technology, the above-mentioned legal relationships are hard to achieve and enforce. The legally binding [[pro rata]] distribution of economic benefit requires that each owner has access to the relevant financial records of other owners. This access includes knowing the share of each co-owner as well as the exact amount of income any co-owner earns from the copyright by using or licensing the software to third parties. This is the reason why, historically, copyright tends to have just a single holder. Blockchain technology enables the dispersion of copyright ownership to a virtually unlimited number of copyright holders, as all income earned on the blockchain is transparent and automatically allocated to all co-owners, depending on their ownership share, and according to the token registry that is implemented in the software.
== Advantages ==
In contrast to owning a [[Share (finance)|share]] in a business entity that holds copyright, the advantages of owning fractional undivided interest in copyright are multiple. For one thing, each owner of fractional undivided interest in copyright owns the [[asset]] itself, which gives the right to directly exploit the asset, without relying on the managerial efforts of others, as it would be if such an asset were owned by a business entity. As such, any income generated through the exploitation of said asset remains in the hands of its owner. This is in sharp contrast to owning a share of a business entity, where the owner of the asset is the business entity. The shareholder is only entitled to a dividend, and the dividend may only be available once all expenses are deducted, and at the sole discretion of the management.
Furthermore, fractional undivided interest in copyright, in contrast to a share in a business enterprise, is not considered a [[financial instrument]] (i.e., a [[Security (finance)|security]]). Consequently, there are no limitations to offering fractional undivided interest in copyright to the public, and all persons, legal and natural, are eligible to acquire and trade copyright without any limitations. This is not the case with company shares, where strict regulations govern the offering and trading of securities, thus significantly limiting the number of persons eligible to take part in the relevant market<ref>http://bit.ly/2VBo0hL>.
from Wikipedia - New pages [en] http://bit.ly/2GHPXuT
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