You have bought an NFT and you wonder: What is it for? What rights do I have over the work? Do I have a license to create derivatives?. The acquisition of these ‘Non-fungible tokens’ raises many questions related to copyright and it is worth noting that it is necessary to differentiate the rights of the original author and those of the buyer. Here we are going to try to clarify what happens with the NFTs and how the rights remain on the work on which they are based.
What are we really buying when paying for an NFT
Buying an NFT means getting a crypto token. Without going into details about blockchain, it can be understood as a public and unique code linked to the original work, because the creator himself has so determined. One of the similes that are used is that it is as if we had a “limited edition with autograph”, a stamp where the author tells the rest of the world that we have the good version, the original or the most valuable copy.
The NFTs do not revolve so much in the value of the work as such, but in the exclusivity and trust that the creator generates by giving us the NFT. The difference between having a JPG of a digital work and having a JPG together with the NFT is that in the latter case we are confident that the author will give the maximum value to our NFT, above any other version of his work.
Technically the author could create new NFTs on the same original work, but this would lose all credibility in the creator. The very idea of the NFT, which is technologically unique, is basically based on the trust generated by the author.
With the purchase of an NFT a “seal of authenticity” is obtained by the creator of the work, but the authorship does not change and copyright is not transferred.
That said, the author of the work is still the original creator. The authorship does not changeOnly when selling the NFT is it allowed for the buyer to do business with it. When we speak of author we refer to the “creator of the original expression in a work”. This person is also the owner of the copyright, unless there is an agreement whereby the copyright is transferred to another person or entity.
Copyright laws were not created with the NFTs in mind, but they do establish a whole series of measures that contemplate them. According describes the World Intellectual Property Organization (WIPO), there are economic rights and moral rights. Among the economic rights it is contemplated that the author can prohibit or authorize the reproduction of his work, the interpretation, the recording in various formats, the broadcasting, the translation and the adaptation. In the case of moral rights, the right to claim the paternity of the work and the right to oppose any modification that may harm the reputation of the creator is recognized.
Both economic rights and moral rights remain in the hands of the author of the work and the purchase of the NFT does not transfer any of these rights. Still, various government bodies and IP registries, such as the European Union Intellectual Property Office (EUIPO) they are intensively studying the possibilities of the blockchain.
Buying an NFT It can be associated with an additional contract, where specific clauses are established, including the transfer of some rights. However, this is something specific and is not necessarily linked to the purchase of an NFT.
The author of a work may assign rights with the purchase of an NFT, but it is an independent process.
As a comment, obviously the creation of an NFT only belongs to the original author. If someone strange creates an NFT of a foreign work, they are infringing copyright. Equivalently, those who bought this illegal NFT would also get nothing in return. This is the case of MetaBirkins, who has sold through OpenSea a “tribute to Hermes” collection, some tokens fetching the equivalent of $ 24,000. However, Hermes later accused the seller of infringing his copyright.
The creation of NFTs from foreign works is one of the problems that is affecting platforms such as OpenSea, where digital authors see how their works are being mined (the process of minting an NFT) by strangers and have problems getting the platform to block them.
today I found out that searching my own name on @opensea brings up 132 instances where my art was minted as NFTs without my permission. apparently the only way to get them removed is by writing individual emails for each listing, which I literally don’t have the time for.
– Loish (@loishh) December 13, 2021
Royalties, the only right that seems to matter with NFTs
NFTs do not transfer rights to buyers, but there is a concept that is closely linked to the media success these tokens are having. It is about the right to royalties or ‘royalties‘, that is, a percentage that can be left on a subsequent sale. These royalties are reflected in the smart contract that is carried out when selling the NFT and is one of the explanations why there are investors betting on the NFTs.
By the very construction of the NFTs, all subsequent resales are reflected in the blockchain and the allocation of royalties can be done in an automated way. In other words, the original author of the work may collect a percentage of each subsequent sale, but not only him. Too prior NFT holder can earn royalties on each subsequent sale.
The automation of royalties with each subsequent sale is the great advantage that can be achieved with NFTs. Due to this percentage obtained by the previous owners, many investors (or companies that want to generate business) have been attracted.
One of the sectors that is getting closer to NFTs is videogames. The creation of these tokens is a mechanism to generate income. If to date we had micropayments to acquire digital goods, the implementation of NFTs associated with each object or character can favor traceability and above all boost resale. However, the reaction of certain communities has not been very positive, as is the case of ‘STALKER 2: Heart of Chernobyl’, which have finally paralyzed their commitment to the NFTs.
One of the criticisms of NFTs is that many are built on a house of cards. There are different ways to obtain an NFT, but in some cases they are hosted on web servers. At the moment when the web has problems, the NFT gives an error.
The purchases and transactions with the NFTs are anonymous, but this also serves as criticism since it can be taken advantage of by the author himself or by the original buyers themselves to artificially grow the value of the NFT, acquiring the NFT at increasing prices. to make other people believe that this NFT has increasing value.
Again with NFTs, and in many other investment fields, everything is based on the confidence that can be built. Other criticisms that serve to reflect how the NFTs work is when there were companies that allowed to buy a plot on the Moon. There was no right associated with that purchase. What is the difference? The idea is that while the organization that sold those parcels did not have any rights to the lands of the Moon, the original author of the work does assure us that the purchase of the NFT will be valid when claiming that we are the “owners” legitimate. Yes indeed, Being the “owner” of the work will only serve to obtain the approval of the original author, in addition to the possibility of reselling that NFT and get royalties.
Some buyers of NFTs they don’t want other users to download copies of the original work. While other buyers such as Vignesh Sundaresan, who acquired the NFT of Beeple’s work for the equivalent of $ 69.3 million, He does not care that everyone downloads the work for free, understanding that the value of its NFT is not subject to the use that the rest make of the image.
NFTs are but one technology through which an author can guarantee exclusivity. It is an entire economy based on the trust that a creator can generate, be it a painter, a music group or a video game company. These NFTs allow you to automate certain transactions and open the door to a future with many options based on them, but currently their greatest value is that they promote resale. Some movements that some see as a bubble and others see as a way to value digital creations. Regardless of how the use of NFTs evolves, it is relevant to note that are not tied to the transfer of intellectual property.
Image | Jernej Furman