The growing market for non-fungible tokens has wrought confusion about their relationship to copyright law. Some of this is due to inexperience and misunderstandings among people minting NFTs, but much also has to do with the limitations of current copyright law and existing licenses.
One possible solution would be the creation of a special license for NFTs. For now, the lack of clarity will likely expose creators and traders to expensive lawsuits.
NFTs and copyright: Common Misconceptions
Many people, both minting and trading NFTs, believe that the owner of the NFT has a copyright on the image that has been minted, but this is incorrect. In law, two sorts of rights are involved – possession of a physical object and the representation of it.
For example, if you own a coffee mug, you can sell it to anyone, but once sold it leaves your possession, and you have no further rights. But you can also take a photograph of it and make as many copies as you want and sell those copies without selling the mug. You can also allow someone else to make copies of your photograph. This is what copyright is: a set of limited rights relating to the reproducibility of an asset.
The copyright owner can license the rights to one person or everyone or for specific purposes only and set the license terms. There are also derivative rights.
For example, the author of a book will generally sell the right to publish the book by itself while retaining the rights to make film or TV adaptations to sell later. There are also derivative rights of derivatives, for example, the TV broadcast rights of a film adaptation of a novel or the right to show the film in a movie theater, make DVDs of it, or upload it to a streaming service.
Importantly, selling a physical object doesn’t include the copyright unless that’s specifically included in the deal. This is most obvious in the case of a novel, where an author can sell their manuscript without selling the copyright. Or if you sell your coffee cup, the new owner doesn’t automatically get the right to make and sell your photograph of it,.
How US Copyright Law Affects NFTs
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Author: Brendan Cochrane
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