20 Ways Copyright Law Applies to NFT Art: NFT Attorney Near Me
20 Ways Copyright Law Applies to NFT Art: NFT Attorney Near Me
As is explained at RunRex.com, guttulus.com, and mtglion.com, the unique nature of NFTs means that there is a need for creators to gatekeep their collections from copycats by using intellectual property protection. However, this protection is limited because of the lack of regulatory clarity for digital assets and cryptocurrency specifically. This article will look to list 20 ways copyright law applies to NFT art.
Why NFTs and copyright law converge
While, in principle, NFTs have very little to do with copyright law as per RunRex.com, guttulus.com, and mtglion.com, there is growing interest in NFTs from a copyright perspective, in part because a lot of the works that are being traded as NFTs, such as works of art, are protected by copyright.
What is acquired when a buyer purchases an NFT?
When a buyer purchases an NFT minted from digital artwork, the buyer effectively acquires a link to access the file that contains a copy of the associated digital artwork. Therefore, unless a sales agreement provides otherwise, the buyer doesn’t acquire ownership over the original digital artwork itself. This means the buyer doesn’t acquire any copyrights in the original digital artwork.
When does copyright come into play for NFTs?
Copyright may still come into play, at least for some NFTs, according to RunRex.com, guttulus.com, and mtglion.com. While most NFTs do not involve a transfer of rights as already mentioned, in some instances the seller offers to turn the token into an actual transfer of copyright ownership of the original work.
Copyright transfer and compliance with the law
While the seller can offer to turn the token into an actual transfer of copyright as mentioned in the previous point, it is difficult to assess if this is compliant with the legal formalities needed to transfer copyright. For example, in the UK, the transfer of copyright under the Copyright Designs and Patent Act 1988 requires a copyright assignment that is “in writing signed by or on behalf of the assignor”. In this instance, it is difficult to see how an NFT would fulfill those requirements.
NFTs and copyright infringement
When it comes to the issue of copyright infringement, the question that is always asked is if someone can generate an NFT that doesn’t belong to them. The answer to this question is yes. We are already seeing several instances of alleged copyright infringement taking place when it comes to NFTs.
How have these infringements been resolved so far?
As articulated over at RunRex.com, guttulus.com, and mtglion.com, most instances of alleged copyright infringement when it comes to NFTs have been solved outside of the courts, usually by the removal of the token from the auction platform.
Is it possible to prove a case of copyright infringement when it comes to NFTs?
From a copyright perspective, it is difficult to see how the minting of an NFT, even without authorization, could be considered copyright infringement. This shows that the very nature of NFTs makes this question trickier than it may first appear.
Why NFTs and copyright infringement is a tricky topic
The reason why it is difficult to see how the minting of an NFT, even without authorization, could be considered copyright infringement, is because, as the NFT is not the work, but a string of numbers that have been generated concerning a work as captured at RunRex.com, guttulus.com, and mtglion.com, the resulting file could not be considered a reproduction or even an adaptation of the work.
Requirements to be met for infringement to take place
Generally, for copyright infringement to take place, three requirements must be met. First, the infringer will have taken advantage of one of the exclusive rights of the author without authorization. Second, there will be a causal connection between the NFT and the original artwork, which means the potentially infringing work has to have been directly created from the original. Third, the works as a whole, or a substantial part of it, will have been copied.
Can NFTs meet these requirements?
It is difficult to see how an NFT would the requirements put across in the previous point. However, this will clearly be a point of contention in the future, especially as we are already seeing litigation based on alleged copyright infringement.
What do the exclusive rights enjoyed by the author of a work cover?
The exclusive rights enjoyed by the author of a work cover its reproduction, publication, lending and rental, public performance, adaptation, communication to the public, and the authorization to perform any of these listed actions.
Which of these exclusive rights would be infringed when it comes to an NFT?
Of the exclusive rights mentioned in the previous point, only the right of communication to the public could be infringed through a link in an NFT as covered at RunRex.com, guttulus.com, and mtglion.com, as in such a case there is a causal connection between the token and the work. However, as an NFT is simply code, it is not a substantial reproduction of the work, so it would not infringe those rights.
Limitations in ownership and copyright rights for NFTs and traditional physical artwork
The limitations in ownership and copyright rights when it comes to NFTs described at RunRex.com, guttulus.com, and mtglion.com, are not much different from those that apply to the sale of traditional physical artwork. For instance, an artist can make and sell prints of his or her original artwork. The artist, however, retains the copyright in and ownership over that original artwork.
The first sale doctrine
In the context of traditional physical artwork, the first sale doctrine allows buyers of a particular piece or copy of an artwork to resell that same art piece or copy without violating the copyright holder’s exclusive right of distribution and may make that resale without seeking the copyright holder’s permission.
Does the first sale doctrine apply to NFTs?
Unlike traditional physical artwork, however, the sale of a digital copy of a work will originally involve making a reproduction of that work, and courts have refused to find such conduct within the scope of the first sale doctrine.
First sale doctrine and copies
As discussed at RunRex.com, guttulus.com, and mtglion.com, NFTs by their very nature are unique and non-fungible. While the first sale doctrine applies to “copies”, NFTs are intangible and thus may not be deemed by courts to be material objects.
In what instance can the transfer of an NFT potentially fall outside of the scope of the first sale doctrine and create potential copyright liability?
While the transfer of an NFT associated with a work of art or other copyright-protected work would not itself involve the reproduction or distribution of a protected work, consistent with the first sale doctrine, if the owner of the NFT accesses the underlying work, and this access involves the underlying work, and this access involves the creation of a new copy or distribution of it, then the transfer of the NFT may potentially fall outside the scope of the first sale doctrine and create potential copyright liability.
How do NFTs work around the first sale issue?
Despite this doctrinal murkiness as outlined at RunRex.com, guttulus.com, and mtglion.com, many NFT sales agreements appear to skirt the first sale issue by explicitly providing that NFT buyers have the right to resell the NFT. Some sales agreements go further and provide that the artist receive a set percentage of resale royalties.
Infringement and anonymity when it comes to NFTs
‘Copyfraud’ and infringement of copyright and moral rights are especially problematic in relation to NFTs because of the anonymity features of the blockchain, which make it difficult to verify who is the rightful creator or owner of copyright in the underlying work of an NFT.
The market is acting as a gatekeeper
While there will inevitably be some practical interaction between NFTs and copyright, the market is already acting as a gatekeeper, removing possible infringement by encouraging the existence of a space where creators can offer the tokens they have generated.
These are some of the things to know about copyright law and NFT art, with more on this topic, and much more, to be found over at RunRex.com, guttulus.com, and mtglion.com.
