NFTs have only been garnering attention in the digital assets sector lately, while they have been in existence since 2014. Although this technological advancement has been around for nearly a decade, many are still unsure of many things. These include the definition and the NFT copyrights, which are crucial for creators and investors to comprehend fully.
NFT (Non-Fungible Token) is one of the most well-known applications of blockchain tech. A token, in this case, is a digitally programmable unit of currency or value stored in a public ledger. Types of tokens are immensely varied, but Ethereum is the most popular one used in the NFT world.
Meanwhile, non-fungible refers to something inherently unique and irreplaceable. For example, a bitcoin is a fungible item that can be traded for another bitcoin without compromising its value. On the other hand, a rare trade card is a non-fungible item. Instead, you would get something different if you traded the limited-edition card for another type of card.
Almost any digital work can be turned into an NFT. These include tangible items that can be digitally represented like a photo, scan, or video. Even since 2021, there have been many types of works turned into non-fungible tokens, including digital works of art, music albums, and memes.
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It's understandable if some people do not give a thought to copyright. Most NFTs are available in metadata files encoded with a work that may already or may not have been copyrighted.
Theoretically, NFTs have almost nothing to do with copyright-related stuff. Any real-world items that can be digitized are highly possible to be an NFT. The original work is solely required to streamline the initial phase of creating the combination of contract address and token.
However, copyright issues have been widely-talked about because most NFT items, like digital arts, are copyrighted. Also, because there is a lack of detail regarding what buyers will obtain, they purchase an NFT item.
Despite being new, NFTs will be treated similarly to other conventional artwork. Artists will instantly get a copyright to the artwork they have just created. A copyright owner will also automatically acquire certain rights when a copyrighted work is completed.
A copyright owner is entitled to own several exclusive rights, including preparing derivative works, reproducing the work of art, and distributing the work’s copies. Therefore, it's the copyright owner who owns the exclusive rights to perform the creation of an NFT about the original work. This procedure can also be classified as a derivative or copy of the initial piece of artwork.
The majority of non-fungible tokens are newly created pieces of artwork. But some are also created by the rightful owners of the copyright. Even so, it's vitally important to thoroughly analyze how the existing copyright law applies to NFT items that are created based on a work that is being copyrighted but not produced by the original owner of the copyright.
The creation of an NFT, popularly known as minting, has its positive side when an artist does the production. It may have favorable implications for the existing condition of resale rights of all artists across the world.
If you have been in this business for quite some time, you must have known that the NFTs' production and selling are primarily uncontrolled. Yet, it's also widely accessible to all people across the globe.
Artists' resale royalty rights have been a debatable issue for decades in the United States. Thanks to NFTs, today's artists can obtain viable solutions to this dispute. The Philippines, Australia, the United Kingdom, and the European Union are among the countries that are recognizing resale royalties of creative work's creators.
As elaborated in the previous paragraph, NFTs are unlikely to be copyrighted because they are incapable of meeting the fundamental requirements of assets that can be protected by copyright. NFTs are essentially representing the information on blockchain tech. Therefore, intellectual property laws cannot classify them as original works of art.
However, standard copyright may still be applied to the work of art that you mint. For that reason itself, no one should mint a creative work they did not produce themselves, for it could be classified as copyright infringement. In North American countries, copyright protection is unfortunately limited to expressing ideas only.
Then, how to protect the copyright of NFT items? At present, the laws and regulations regarding the copyright of NFTs have yet to be enacted. However, experts in the industry and legal professionals have started to pay close attention to the market's copyright concerns.
According to the managing partner of Brookwood P.C. Collins Belton, artists who have their NFT work stolen still have legal protections. The only way to preserve the copyright of their work is by filing takedown notices to the Digital Millenium Copyright Act (DMCA) against the marketplace where the artist sell their goods.
Artists can also be more attentive when selling their NFTs. For the artists who own the copyrights of their work, it's vitally essential to spell out precisely what they are offering to the purchasers.
When you sell an NFT item, you are not transferring or even assigning the copyright of your work to the purchaser. Of course, it could be possible to transfer the copyright if both involved parties specifically agreed in a formal contract.
Also, note that you need to arm yourself with legal advice should you want to transfer the copyright. It should protect the standard copyright of the work of art you sell as an NFT in a particular nft marketplace.
The conflicts over NFT copyrights cannot be avoided. However, most issues will usually be resolved by the marketplace where the problems occurred. The NFT markets even have made efforts to prevent infringement. Nevertheless, due to the market nature and the motivation to acquire high profits, the NFT verse will still likely create copyright issues.