Here’s what you need to know
Copyright plays an important but often overlooked role in the NFT market.
Posted on 13 June 2023 at 4:57 AM EST.
NFTs give artists and creators new ways to own and sell their creative works, creating a new monetized digital economy powered by blockchain. However, who owns an NFT’s copyright is not always clear. Read on to learn more about NFT copyright requirements from both a creator and an owner perspective.
What is copyright?
Copyright is a type of intellectual property (IP). The World Intellectual Property Organization defines IP as “creations of the mind, such as inventions, literary and artistic works; designs and symbols, names; and images used in commerce.” Copyright protects this type of work and prohibits non-creators from taking undue credit or profiting from work they did not create.
Three types of IP are protected by law: copyright, patent and trademark.
Copyright refers to a legal right granted to the creator of a particular work. This legal right allows them to copy, distribute copies, print, publicly exhibit the work and produce derivative works. Derivative works relate to works created from the original idea and include ongoing content, for example a sequel to a book or film.
While in the physical world all IPs are protected by law, enforcing similar laws in blockchain-based creations such as NFTs remains a challenge due to the ease of sharing digital content.
Do you own the copyright to your NFT?
Buying NFT art is like buying a physical piece of art. As a buyer, you only own the art, but the artist remains the copyright owner. Should you as a buyer wish to receive the copyright to the artwork, you must have a separate agreement with the artist in which you purchase the copyright.
Simply put, when you buy an NFT from any NFT marketplace, you typically do not own the copyright to the NFT.
Instead, you’re technically buying an ownership in the token that illustrates the underlying item, whether it’s music, a photograph, or a piece of art. What this gives you is the right to hold, and possibly, if you choose, to sell the NFT.
However, as an NFT owner, you do not own the copyright to the underlying asset. The underlying asset exists off-chain, and unless the NFT creator (ie the copyright holder) clearly states that by selling the NFT, they are also selling the copyright to you, you cannot make a copy of the NFT you own or any derivative products. works of it.
What artists/creators should know
NFTs provide artists and creators with a unique opportunity to monetize their work. By tokenizing their creative work, artists can be compensated for their work while still retaining full ownership of their IP unless they sell the copyright to that work. In addition, they can also decide what an NFT holder can or cannot do with their work and pursue legal action if the holder does not comply with the copyright rules.
This means that without exclusively selling the NFT copyright to your work as a creator, a buyer of your NFT work cannot make a copy of that particular NFT, produce derivative works, or use it in any commercial way.
What collectors should know
As an NFT collector, collecting any kind of NFT works does not make you the NFT copyright owner. You can only become an NFT copyright owner if the NFT creator exclusively grants or sells the copyright to you. Therefore, you should never emboss the original NFT, create any derivative works, or commercially use the NFT.
Why copyright is important in the NFT area
Copyright in the NFT area is as important as copyright in the physical world. Minting NFTs or purchasing NFTs representing copyrighted work can easily lead to legal problems due to copyright infringement. Copyright infringement refers to the use of copyrighted work without the exclusive permission of the copyright owner.
Buying an NFT does not make you a copyright owner, nor does it give you copyright in the inherent asset unless categorically stated. Therefore, as an NFT holder, you can only hold, sell or transfer NFTs.
Investors who want to achieve more with their non-fungible tokens without the legal implications should choose NFT projects that provide copyright licenses. If you are unsure whether the NFT you are purchasing also comes with a copyright transfer, check with the project team or documentation.
Also, if you plan to use digital content you’ve purchased as an NFT in a commercial way, be sure to consult an attorney who specializes in intellectual property and copyright laws. That way, you know best how or whether to proceed with the NFT purchase.