NFT Copyright Explained
NFTs (Non-Fungible Tokens) are digital assets that run on the blockchain. Each NFT is unique and it doesn’t have an identical replacement. That is why they are “non-fungible”. Fungible items like Bitcoin have identical replacements. For example, you can exchange 1 Bitcoin for another Bitcoin without a change in value. Since NFTs run on the blockchain, they cannot be reproduced or duplicated. Note that the blockchain is the same technology that powers cryptocurrencies such as Bitcoin and Ethereum. Each NFT can only have one official owner at a time.
From the above description, you cannot be forgiven for not thinking about NFT copyright at all. Most NFTs are metadata files encoded using work that could or could not be under copyright protection. Anything that can be turned into digital can be made into an NFT.
The original item is only needed when creating the unique combination of the contract address and the token ID. So, copyright in NFT is not a big deal.
However, there is an increasing interest in NFT copyright among NFT investors, which has made copyright and NFT a hot topic today. The reason is that most of the work that is traded as NFTs is protected by copyright. For example, music and other forms of art. Thus, if you had the question:
Can you make an NFT of copyrighted material?
Yes, it is possible. However, you must be the owner of the copyright rights over that material. Otherwise, you may land yourself into NFT copyright issues.
Who Owns NFT Copyright?
Most potential NFT investors ask themselves this question:
Does buying an NFT give you copyright?
One of the major NFT copyright issues is the confusion that surrounds the rights that a buyer acquires after purchasing an NFT. There has been no clear understanding of what one exactly gets after buying NFT. Some buyers think buying an NFT gives them the right to acquire the underlying asset such as artwork as well as its accompanying rights, which is not correct.
It is worth knowing that after buying an NFT, one does not automatically get the copyrights associated with the original work that is represented by the NFT. Buying an NFT gives you the license to use the digital version of the creative work. However, it doesn’t give you the license to use the NFT for commercial purposes. In simple terms, you only buy the metadata that is associated with the underlying work, but not the work itself.
Some of this confusion arises from the fact that some NFTs are sold at very high prices. With pixel art costing more than USD 1 million, the buyer may easily assume that they have bought more than just a string of code.
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There has also been confusion in the main press when it comes to reporting NFT sales. The reporters normally think that it’s the artwork that has been sold, but it’s not the case. Most people may find it difficult to comprehend that NFT buyers spend huge sums of money just to buy a metadata file and a string of letters and numbers of an artistic value, but that is exactly what an NFT is.
When buying NFT, it is good to have the NFT copyright agreement in written form, especially if you want to use the NFT for commercial purposes. This means that you must be granted full copyright over the NFT and this should be in written form and signed by all parties involved. Otherwise, the original owner of the NFT will remain with the NFT copyright and he will be able to use it for commercial purposes, instead of the new owner.
This means that copyright in NFT is an important factor to consider when buying NFT. The buyer should consider the terms and conditions of the marketplace as far as buying the material is concerned as well as the digital contract with the NFT copyright agreement.
Since some NFTs are sold at a very high price, it is recommended that you consult an experienced NFT and copyright lawyer before buying an NFT.
If you are an artist and you sell unique digital copies of your work as NFTs, it is recommended that you register your artwork’s copyright with the necessary body. In the U.S for example, you can register with the U.S copyright office.