NFT IP Laws and Rights: As the Non-Fungible Token (NFT) ecosystem is growing and maturing, NFT creators as well as subsequent buyers are seeking possibilities for commercialising the NFT artwork. This is leading to copyright claims and lawsuits.
This is why a clear understanding of Intellectual Property (IP) laws and rights regarding NFTs is important. Let’s take a deep dive into intellectual property laws and rights:
What is Intellectual Property?
For those who don’t know, Intellectual property is an umbrella term for a group of intangible assets (assets that are not physical in origin), which refers to intellectual or cognitive creations such as inventions, literary and artistic works, designs, symbols, names, music, and pictures that will be used commercially.
Patents, copyright, trademarks, and trade secrets are the main categories of intellectual property rights.
Who owns the IP of an NFT?
This is where things get interesting. According to experts in the industry, unless the NFT creator transfers copyright ownership to the NFT buyer, the creator retains legal ownership of the NFT’s intellectual property, irrespective of the NFT’s ownership transfer.
To put it simply, unless the creator takes explicit efforts to ensure that it happens, copyright law does not grant an NFT owner any intellectual property rights .
Please note that any purchase of NFT does not transfer the copyright to the buyer automatically. As a result, even if the buyer of Jack Dorsey’s first tweet spent millions of dollars on the NFT, the buyer would not be able to use the NFT commercially (for example, by printing it on a T-shirt or hat, i.e., merchandising) without permission. Because the copyright is still owned by Twitter and Jack Dorsey.
The intellectual property must be assigned in writing to the buyer if he or she wants that. This will not happen automatically on the sale of an NFT unless expressly stated differently, either in the smart contract or elsewhere.
According to experts, one solution to the intellectual property transferability problem is for the NFT creator to provide specific copyright rights to NFT owners, aka a license.
The National Basketball Association (NBA) Top Show, for example, stated in their NFT purchase terms and conditions that the owner had a licence to “use, copy, and display the designs of his NFT solely for personal use.”
Besides, the Bored Ape Yacht Club (BAYC), permitted NFT owners to commercially use the designs of their apes, implying that the NFT owner could sell any merchandise that included the designs of the NFT they purchased.