NFTs provide artists and creators with new ways of owning and selling their creative works, creating a new, monetizable digital economy powered by blockchain. However, who owns an NFT’s copyright is not always clear. Read on to learn more about NFT copyright essentials both from the point of a creator and an owner.
What Is Copyright?
Copyright is a type of intellectual property (IP). The World Intellectual Property Organization defines IP as the “creations of the mind, such as inventions, literary and artistic works; designs and symbols, names; and images used in commerce.” Copyright protects these types of works and prohibits non-creators from taking undue credit or profiting off work they didn’t create.
Three kinds of IP are protected by law: copyright, patent, and trademark.
Copyright law relates to a legal right given to a specific work’s creator. 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 encompass consecutive content, such as a sequel to a book or movie.
While in the physical world, all IPs are protected by law, enforcing similar laws in blockchain-based creations like NFTs remains a challenge due to the ease of sharability of digital content.
Do You Own the Copyright to Your NFT?
Purchasing NFT art is like buying a physical work of art. As the buyer, you only own the art, but the artist remains the copyright owner. Should you, as the buyer, want to receive the copyright ownership of the artwork, you would need to have a separate arrangement with the artist in which you’d buy the copyright.
Simply put, when you purchase an NFT from any NFT marketplace, you don’t typically own the copyrights to the NFT.
Instead, you are technically buying a proprietorship in the token that illustrates the underlying item, whether music, a photograph, or a work of art. What this gives you is the right to hold and, eventually, should you choose, to sell the NFT.
Still, as an NFT owner, you don’t own the copyright of the underlying asset. The underlying asset exists off-chain, and unless the NFT creator (i.e., 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 works of it.
What Artists/Creators Should Know
NFTs present a unique opportunity for artists and creators to monetize their work. By tokenizing their creative work, artists can get compensated for their work while still retaining complete ownership of their IP unless they sell the copyright to the work in question. In addition, they can also decide what an NFT holder can or can’t do with their work and pursue legal action if the holder doesn’t hold the copyright rules.
This means that without exclusively selling the NFT copyright ownership to your work as a creator, a buyer of your NFT work cannot mint 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 work doesn’t make you the NFT copyright owner. You can only become the NFT copyright owner if the NFT creator exclusively gives or sells the copyright to you. Therefore, you should never mint the original NFT, create any derivative works, or commercially use the NFT.
Why Copyrights Matter in the NFT Space
Copyrights in the NFT space are just as important as copyrights in the physical world. Minting NFTs or purchasing NFTs representing copyright-protected work could easily result in legal issues due to copyright infringement. Copyright infringement refers to using copyright-protected work without exclusive permission from the copyright owner.
Buying an NFT doesn’t make you the copyright owner, nor does it give you copyrights to the intrinsic asset unless categorically stated. Therefore, as an NFT holder, you can only hold, sell, or transfer the NFT.
Investors who want to accomplish more with their non-fungible tokens without the legal implications should opt for NFT projects that provide copyright licenses. If you are unsure of whether the NFT you purchase also comes with a transfer of copyrights, check with the project team or documentation.
Moreover, if you plan to utilize digital content you have purchased as an NFT in a commercial manner, make sure to consult with a lawyer specializing in intellectual property and copyright laws. That way, you will know best how or whether to proceed with the NFT purchase.