The NFT boom hit a lot of people in the art market. From emerging artists to international celebrities, many have tried to capitalize on this billion-dollar feel. While NFTs have dominated the information cycle, the application of copyright to this puzzling trend has remained uncertain. The courts have not yet answered the question of whether the law should extend copyright protection to assets that, while intrinsically linked to a pre-existing work, do not have the necessary “embodiment” to constitute a “copy” or derivative under copyright law. In essence, NFTs are not compatible with the current construction of copyright law. Once a work of art is no longer protected by copyright, it falls into what we call the “public domain.” There are many ways in which art can become in the public domain. First, it becomes in the public domain once copyright expires. In most countries, including the United States and the European Union, copyright exists 70 years after the artist`s death. In other countries, such as Canada, copyright exists 50 years after the artist`s death.
Art can also be considered public domain if the artist has deliberately dedicated his or her work to the public domain. While an image of the underlying work may help promote or identify the NFT, there is no connection to the underlying work. Mere association is not sufficient to invoke copyright infringement. For example, each NFT in Quentin Tarantino`s Pulp Fiction does not contain a reproduction of the underlying work. According to Miramax`s complaint, Tarantino`s planned collection consists of “7 NFTs, each containing a high-resolution digital scan of Quentin`s original handwritten script pages for a single scene from his script for Pulp Fiction.” This claim is false: the token that resides on the blockchain is not the scene of pulp fiction. Instead, the NFT itself is a token on the blockchain that allows the NFT buyer to view the full-resolution version of the scene by clicking on a separate URL. Although the separate URL embedded in the NFT contains a link to a copy of the underlying work, it is not itself a copy of that work. Therefore, an NFt is not a reproduction of content; It is simply a token that authenticates the source of the content. For this reason, NFTs themselves are not “copies” and are therefore not subject to copyright infringement.
In fact, getting NFT owners to have the copyright they think they have is a more subtle problem than it seems. Consider the following passage from the Bored Ape Yacht Club Terms and Conditions: But the internet has effectively reduced the cost of copying to zero. NFTs are, in a way, an answer to this: since there are only a limited number of NFTs in a currency, they create a digital scarcity, and they can be priced like the books and CDs of yesteryear. But they come up against the fundamental fact of the Internet, which is that it is trivially easy to make copies, and that the limits of copyright are being pushed every day by ordinary people. In terms of legal issues, buyers should first and foremost consider what you are buying? A marketplace like NBA Top Shot has very specific conditions, including prohibiting the commercial use of an NFT you buy on its platform. Other platforms, such as Mintable, are supposed to allow you to acquire the underlying copyright when you purchase the NFT. These are completely different circumstances. Since each NFT is unique, ideally, anyone purchasing an NFT should consider the legal rights and implications of each NFT platform and specific NFT before purchasing it. NFTs are unlikely to benefit from copyright protection because they simply represent certain works on blockchain technology. They would not be classified as original works or derivative works under intellectual property law.
However, works on which the NFT is created may benefit from copyright protection. The rights in these works belong to the author/assignee as set forth below. Yes, an artist can transfer or assign their copyright to someone else. The transfer or assignment must be in writing and signed by both parties. Note that you should seek legal advice to proceed with the transfer or assignment of copyright. If, as mentioned above, you sell an NFT, you are NOT transferring or transferring the copyright to the buyer. However, this would be possible if this was expressly agreed by both parties in a written contract. A license is more limited.
Bob would grant Alice some rights, but he would retain all copyright, so the results might look like this: If you`re talking about digital copies instead of physical copies, things get complicated because the law has an unintuitive definition of “copy.” It includes all “tangible objects. from which the work can be perceived, reproduced or otherwise communicated”, including computer hard drives and sometimes even computer memory. [5] Each computer that interacts with the work creates a separate “copy” for copyright purposes; Even if you navigate to a single web page, a “copy” of the images on that page is created and your computer can view it for you. [v] Ross Chalmers, Footprint: Do You Own Copyright While Buying an NFT?, YAHOO FINANCE (2021) finance.yahoo.com/news/footprint-own-copyright-buying-nft 230502274.html#:~:text=Buying%20an%20NFT%20does%20not,any%20other%20rights%20in%20work. A fourth possibility is that Fern`s license to create new derivative works ends, but they can continue to use existing derivative works they have already created. For example, copyright law deals with certain license terminations. But if Fern`s license continues, what will happen to the royalties Fern promised to pay Alice? Should they also be given to Bob? Ownership of an NFT can be used to give the owner substantial control over a creative work, but this control is not automatic. Copyright does not give rights to an NFT owner unless the creator takes positive steps to ensure that this is the case – ideally by executing a standard and formal copyright license for the work associated with the NFT. So what can you do to protect yourself from this situation? Before you buy an NFT project, do your own research. Discover developers and artists and search for similar projects. If the project has a website, find out what IP rights you are purchasing. If you`re spending large amounts of money, it may be helpful to hire a lawyer to determine if there is a registered copyright that fits the project.
Some NFTs cause copyright issues by using stolen works of art by famous artists or works with which NFT`s creators have no affiliation and license to use. Copying these works in the context of NFT marketing (e.g. for OpenSea listings) may itself constitute copyright infringement. A creator of NFT could engage in false advertising by suggesting that NFT owners receive rights to these stolen works. And because copyright infringement is “strict liability,” NFT owners who make copies of stolen artworks could also be held liable for the infringement, even if they were tricked by NFT`s creator into believing they were properly authorized. The company filed a 47-page lawsuit in the U.S. District Court for the Southern District of New York, and Rothschild defended itself, saying it is protected by the First Amendment, which guarantees free speech. It is not yet clear how this lawsuit will evolve, but it is representative of the misconceptions surrounding NFT copyright and its impact on the industry within the industry.
