Intellectual Property Tokenization: A Guide

Catalogue owners, producers and patent holders share a problem: royalty income arrives over decades, while the need for capital is immediate. Intellectual property tokenization structures part of that future income as an instrument investors can buy today. Done under EU securities law, it is a regulated issuance, with a supervised register, disclosure duties and a supervisor behind it. This guide explains what the buyer actually acquires, how the Spanish and European wrapper works, where the honest limits are and how an issuance proceeds.

What the buyer acquires, and what stays with the rights holder

The token does not transfer the copyright or the patent. The buyer acquires a financial instrument issued by a vehicle, and that instrument pays according to the royalty income the vehicle collects. Depending on the structure, the instrument is a bond, a participation or a share in the vehicle that holds or administers the exploitation rights. The investor’s position is defined by the instrument’s terms, not by intellectual property law. Nothing in this structure is specific to blockchain; the token changes how the security is represented and transferred, not what it is.

The rights holder keeps authorship. Under Spanish copyright law, moral rights cannot be transferred, so attribution and the integrity of the work stay with the author whatever the financing structure (Royal Legislative Decree 1/1996, Spanish Copyright Act). What moves to the vehicle is defined economic content: specific exploitation rights, or the receivables they generate, for a defined scope and period.

This distinction protects both sides. The investor holds a security with documented rights over cash flows, enforceable like those of any bondholder or shareholder. The author or inventor is not selling the work; they are financing against part of its income, on terms written into the issuance documents.

The Spanish and EU wrapper

If the instrument carries the rights of a share, a bond or a fund unit under Annex I of MiFID II, it is a security token and securities law applies (Directive 2014/65/EU). MiCA does not govern it: crypto-assets that qualify as financial instruments are excluded from its scope (art. 2.4, Regulation (EU) 2023/1114).

Spain gives this structure a working register. Law 6/2023 recognises financial instruments represented on distributed ledgers and requires an ERIR, the authorised entity that keeps the legal register of holders, working as the digital notary of the issuance. The regime is developed by Royal Decree 814/2023, the first ERIR, URSUS-3 Capital A.V., was authorised in November 2024, and CNMV supervises the circuit (art. 8, Law 6/2023; RD 814/2023).

Disclosure follows the size of the offer. Since 5 June 2026 the EU prospectus exemption covers offers up to 12 million euros over 12 months, with a member state option to lower it to 5 million; the Spanish adaptation is in progress. Above the applicable threshold, a CNMV-approved prospectus can be passported to any EU member state (Regulation (EU) 2024/2809; arts. 24-25, Regulation (EU) 2017/1129).

For the rights holder the wrapper has a second effect: the financing does not dilute the operating company. The vehicle isolates the assigned income, the company keeps its capital structure, and the scope of what was assigned is documented for future licensing negotiations.

Honest limits

Royalty income is variable. Streams, licences, broadcasts and box office depend on future usage that nobody controls. Past collections describe the past. The issuance documents must present them as verified history, never as a forecast of returns, and the investor materials should say so plainly.

The chain of title decides feasibility. Co-authors, publishers, collecting society mandates, prior advances and pledges all sit on the same income. An issuance can only package what the vehicle demonstrably controls. If the rights audit cannot establish that control, the project stops there, and it should.

Liquidity is limited today. Supervised secondary trading of security tokens in the EU runs through venues under the DLT Pilot Regime, which are still few. A buyer of royalty-linked instruments should expect to hold them rather than trade them (Regulation (EU) 2022/858).

Valuation has no market standard. Catalogue and patent valuations vary widely by method and assumptions. A serious issuance uses independent valuation and conservative disclosure, and explains the method to investors instead of quoting a single figure as fact.

The test that follows from these limits is simple. If any of the four cannot be disclosed comfortably in the investor documents, the issuance is not ready. Applying that test before engaging advisers costs nothing and filters most weak projects.

The process

1. Rights audit. Verify the chain of title, registrations, existing contracts, collecting society statements and the documented history of collections.
2. Structure. A vehicle receives the exploitation rights or the receivables. The instrument is designed on top: debt, participation or equity, with payment terms tied to collected income.
3. Disclosure. Choose the prospectus or exemption path according to the offer size, and prepare investor documentation with the royalty history presented as verified data.
4. Registration and issuance. The ERIR records the instrument and keeps the register of holders; investors complete KYC and AML checks and subscribe.
5. Life cycle. The vehicle collects royalties and pays holders under the instrument’s terms, with payments and transfers executed against the register.

Timelines depend almost entirely on stage one. A catalogue with clean registrations and centralised collection can move through structuring and registration in months. Fragmented rights or disputed shares add time before the first legal document is drafted, because the audit must close first.

A Spanish-language analysis of music and audiovisual royalty structures is available in our guide to tokenización de derechos de autor. For the broader framework and how HokenFi works with authorised partners, start at hokenfi.com/en.

This content is educational. It is not legal, tax or investment advice. Always check the current version of each rule on BOE and EUR-Lex.