DAOs for Innovation: A Legal Guide (USA Law)
A four (IV) part series on utilizing blockchains for decentralized innovation- by Gregory J. Rigano, Esq.
(Educational purposes only)
As per the United States District Court, Southern District of New York, citing the United States Court of Appeals Second Circuit,
An initiative “that was primarily a means whereby participants could pool their own activities, their money and the promoter’s contribution in a meaningful way was not an investment contract.”
— Nelson v. Stahl, 173 F.Supp.2d 153 (S.D.N.Y. 2001), citing SEC v. Aqua–Sonic Products Corp., 687 F.2d 577, 582 (2d Cir.1982).
In this four (4) part series, we present a legally compliant technical architecture, including legal case law analysis, for funding and participating in a decentralized autonomous organization (“DAO”) whose mission is innovation. DAO stakeholders can become a node in a R&D network — collectively feeding the network with information serving to fuel innovation while at the same time owning the value. This a model can be utilized for innovation in computer science, biomedical, rocket science, etc.
Such an architecture has the potential to radically scale human advance in technology R&D through a blockchain enforced digital commons. Traditionally, R&D is confidential around high walls leaving stakeholders without access due to faulty analogue intellectual property (“IP”) enforcement — the Byzantine General’s Problem (Lamport, et. al, The Byzantine Generals Problem, ACM Transactions on Programming Languages and Systems (TOPLAS), v.4 n.3, p.382–401, July 1982). Through this architecture, all digital commons communications and technology information (source code, clinical trials data, know-how, etc.) are IP collectively owned by the digital commons as verified and enforced through blockchain proof of existence. IP rights can be as open or closed source based in market supply and demand. Because IP can be digitally enforced, for the first time such rights can be fungible and commoditized through tokenization at global scale.
Part I: Legal Concepts in Innovation
Part II: The Technical Architecture + Legal Compliance
Part III: Analysis of Applicable United States Federal Securities Law
Part IV: The Future of Innovation
“Blockchain tech brought global coordination to the digital realm, when it was only possible to huge companies or nation-states… This is the dawn of a new era for global coordination.” — Manuel Araoz, October 2, 2018, Twitter: @Maraoz
Notes: DAO = Decentralized Autonomous Organization
Gregory J. Rigano, Esq is a free speech maximalist, founder of the Blockchain and Law Meetup NYC, and CEO of IKU. Educational purposes only. Do your own research. Stay safe.
Feel free to reach out if you have any comments, questions or if you believe there is anything inaccurate: gregor@iku.network
